EUR/USD (a daily chart of which is shown), after an expected bearish correction in the first half of the past week, went on to break the 1.4050 high set the prior week. This past Friday saw the pair breakout significantly above 1.4050 to hit a high of 1.4166,  before closing the week just below this new 2009 year-to-date high. Week after week since the lows in late April, price action has made higher highs and higher lows to form a steep, well-defined uptrend that has been in place for more than a month now. For the upcoming trading week of June 1-5, the next major upside resistance target in the pair’s current bullish run resides around the 1.4360 price region. Before that target is potentially reached, however, more correction and consolidation should occur. Near-term support to the downside within the context of the continuing uptrend resides first around the broken 1.4050 previous resistance level. Further support to the downside resides around 1.3800, which is the approximate level of the last swing low, and the noted uptrend support line.

- James Chen, CTA, CMT

* For information on my book, Essentials of Foreign Exchange Trading (Wiley), please click here.

* Follow my intraday forex updates on Twitter: http://twitter.com/JamesChenFX

USD/JPY (a daily chart of which is shown) produced some major whipsaw action towards the end of the past week as bullish price action for the first four days of the week abruptly became bearish at the very end of the week. This bearishness appeared as the U.S. dollar weakened substantially against all other major currencies on Friday. As a result, Friday’s losses erased all of the significant gains made in the pair on Thursday. For the upcoming trading week of June 1-5, as the dollar potentially continues its weakening trend against other major currencies, the USD/JPY could continue to be weighed down. To the downside, the key event to watch for would be any breakdown below 93.50, which would be a significant bearish indication potentially targeting further major support around 91.00.

- James Chen, CTA, CMT

* For information on my book, Essentials of Foreign Exchange Trading (Wiley), please click here.

* Follow my intraday forex updates on Twitter: http://twitter.com/JamesChenFX

Price action on AUD/USD has reached the key psychological 0.8000 level on substantial dollar weakening. This pair has been entrenched in a relatively steep uptrend extending from the March lows, and has further accelerated its uptrend since late April. For more technical analysis on this currency pair, please click here for Friday’s (5/29/2009) Chart of the Day.

Substantially dollar-weakening price action on USD/CAD, a daily chart of which is shown, has hit and slightly broken below a long-term uptrend support line extending from a major low back in November 2007. Further follow-through on the break should target key support in the 1.0800 price region.

Price action on EUR/USD (a daily chart of which is shown), despite a bearish correction, continues to traverse a steep, short-term uptrend channel. For more technical analysis on this currency pair, please click here for Thursday’s (5/28/2009) Chart of the Day.

UPDATE: As of Friday (May 29) morning, price action on this pair has broken out above the noted 1.4050 high, reaching a new high of 1.4133. Further bullishness should ultimately target further resistance in the 1.4300-1.4350 price region.

Price action on USD/CHF, a daily chart of which is shown, has consolidated right at a key support confluence area. This support region includes a long-term uptrend support line extending from the March 2008 low, as well as a key support/resistance price region in the 1.0810-1.0850 zone. At the same time, price is also traversing a steep short-term downtrend channel. Any breakdown of the support confluence within the context of this downtrend channel should indicate substantial bearishness going forward. In that event, the immediate further support target resides in the region just above 1.0700, with yet further major support around 1.0600. Upside resistance within the context of the current downtrend resides around the top line of the steep parallel downtrend channel.

UPDATE: As of Friday (May 29) morning, significant dollar weakening has prompted a substantial breakdown of support that has reached the noted support region around 1.0700. In the case of further bearishness, the next support target to the downside resides around the 1.0600 price region.

Strongly bearish price action on EUR/GBP has descended all the way down to a key support level around 0.8650 as of Wednesday (5/27/2009) morning. For more technical analysis on this currency pair, please click here for Wednesday’s Chart of the Day.

Just as a quick reminder, I will be conducting a live, open webinar tomorrow (Thursday, May 28, 2009) entitled, “Short-Term Support and Resistance Trading with Naked Charts.” It is a free webinar open to all, and will be held tomorrow at 16:00 GMT (12:00 Noon U.S. Eastern Time).

Here is the description: “Learn the methods and techniques of short-term S/R trading in the forex market using just lines (horizontal and diagonal) and price action. Find out how traders successfully read and trade currency price action on a short-term basis without any indicators. Covers entries, exits, psychology, and risk management.”

For more information and to pre-register, please click here: http://www.fxstreet.com/live/sessions/session.aspx?id=968a07dd-4a49-4ef9-aa4c-2a5b4b0db639

Hope to see everyone there!

- James Chen, CTA, CMT

A recording of the webinar I gave last week entitled, ”Trading Forex Volatility” is now online. It can be accessed here: http://transcripts.fxstreet.com/2009/05/trading-forex-volatility.html . Hope you enjoy it!

- James Chen, CTA, CMT