-EURUSD tests resistance line ahead of 1.29
-GBPUSD searches for a low
-AUDUSD and NZDUSD well established risk levels
-USDJPY drop corrective so far
-USDCHF...up over 400 pips in less than 20 minutes
Euro / US Dollar
Quite simply, the series of higher highs and higher lows since early March is bullish. I have written recently that know that once the turn occurs, it will be fast...there are 2 areas to look for longs; the low side of the diagonal line and a break of the top side. Another line, drawn off of the February 9th and 23rd highs, has provided resistance to additional gains so far. I do expect resistance to give way and for the EURUSD to make its way to 1.33. This outlook is intact as long as price is above 1.2610.
British Pound / US Dollar
I am awaiting confirmation of a B wave low in order to go long and ride wave C higher to 1.50 +. The count that I am working with now treats the rally from 1.35 to 1.4990 as wave A of a flat (flats have subwaves 3-3-5). Wave B is in 3 waves and waves a and c of B are roughly equal (a common occurrence). Exceeding 1.3954 would be the first sign that a low is in place. Until then, there is the possibility of price testing 1.35.
Australian Dollar / US Dollar
It is probable that a flat is underway in the AUDUSD as a complex W-X-Y pattern that will end above .7275. The AUDUSD is trading above the resistance line drawn off of the January 7th and February 9th highs; a daily close above would be bullish. As is usually the case, momentum (RSI) has already broken through its comparable resistance. Bulls can move risk from .63 to below .64.
New Zealand Dollar / US Dollar
The NZDUSD has declined impulsively (5 waves) since its 2008 high and that decline was followed by a 3 wave rally (from the November low). The decline from .6090 is now in 5 waves and the risk of a sharp advance back to at least .5454 in a small second wave is high. The close above the trendline from early January as well as divergence with RSI on the daily favors bulls. Bulls can move risk from .4890 to .4975.
US Dollar / Japanese Yen
I wrote yesterday that a drop below Elliott channel support would begin to suggest that a top is in place. That line is at 97 today. The key word in that phrase is ‘begin'. At this point, there are only 3 waves down from the top so a top can not be confirmed. In fact, a push through 99.72 is required in order to complete 5 waves up from 97.10.
US Dollar / Canadian Dollar
Longer term, if the USDCAD is breaking higher in an impulse as a terminal thrust from a triangle (that had been underway since October), then price needs to remain above 1.2348. Near term, weakness below 1.2709 looks likely but there in order to complete a short term head and shoulders top. There is potential support from the 61.8% of 1.2348-1.3068 at 1.2618. This level is reinforced by a short term support line.
US Dollar / Swiss Franc
YIKES...this is why we use stops. There SNB has exercised verbal intervention. The USDCHF soared over 400 pips but the fact that a diagonal from 1.13 has not yet been fully retraced makes me skeptical of this move. One possible outcome is an A-B-C flat...wave C would end below 1.1430. I'll post alerts if I see a short opportunity.
Jamie Saettele publishes Daily Technicals every weekday morning (930 am EST), COT analysis (published Monday mornings), technical analysis of currency crosses throughout the week (EUR on Tuesday, JPY on Wednesday, GBP on Thursday, AUD on Friday), and the DFX Trend Index every day after the NY close. He is also the author of Sentiment in the Forex Market.
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