Latest Outlook for 4 USD-Based Pairs

12/01/2011 6:00 am EST

Focus: FOREX

Joel Kruger, technical currency strategist for DailyFx.com, discusses his outlook for major currency pairs including EUR/USD, USD/JPY, USD/CAD, and AUD/USD.

EUR/USD

The market remains under some intense pressure and is now fixated on a retest of the key October lows at 1.3145. Look for the latest rallies to be well capped below 1.3500 on a daily closing basis, while ultimately, only back above 1.3870 would negate the outlook.

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Once 1.3145 is taken out, it will negate the corrective October price action and should result in a more aggressive bout of selling into the 1.2000’s. We continue to project weakness over the coming weeks into the lower 1.2000’s as per the monthly chart.

See related: It’s High Time to Short EUR/USD

USD/JPY

The market has managed to successfully hold above the bottom of the daily Ichimoku Cloud to further strengthen our constructive outlook.

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We look for the formation of an inter-day higher low by 76.55 ahead of the next major upside extension back towards and eventually through the recent multi-day highs by 79.55. Ultimately, only a close back below the bottom of the Ichimoku cloud would negate the outlook and give reason for pause.

NEXT: See Latest Chart Patterns for USD/CAD, AUD/USD

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USD/CAD

Our constructive outlook remains intact with the market focused on a retest of the key October highs by 1.0660.

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From here, look for any inter-day pullbacks to be very well supported above 1.0200 on a daily close basis, in favor of an eventual break and fresh upside extension beyond 1.0660.

See related: Trade Retests of Key Levels Like a Pro

AUD/USD

The latest break and close back below parity further solidifies our core bearish outlook. Now the door is open for an acceleration of declines.

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From here, wee see risks for a complete and full retracement back to the October lows at 0.9385 and any intraday rallies should now be very well capped below 1.0100 on a daily close basis.

The next short-term level to watch below comes in at 0.9620 and we will see if the market can establish below over the coming sessions.

By Joel Kruger, technical currency strategist, DailyFX.com

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