The GBPUSD has surged through 1.6130 and is testing the former neckline from the September head and shoulders breakdown. There is Fibonacci resistance at 1.6350. The USDJPY has continued higher and a target is 92.80.
Euro / US Dollar
Focus remains on the top of the channel from early July (5th wave channel, more on that below), which is at 1.5013 today. The channeling nature of the EURUSD since July suggests that this labeling is correct (treating the rally from the June low as wave v of C). This means that the push above 1.4847 is likely wave of 5 of v of C. Again, the channel top is 1.5013 today and increases about 11 pips per day. Aside from wave count and momentum readings, there is nothing else to suggest a top. In order to trade from the short side, we need to wait for a daily bar/candle reversal pattern.
British Pound / US Dollar
The GBPUSD has returned to test the head and shoulders neckline that was broken in September. Resistance extends to a resistance line extended from the August and September highs, which is at 1.6478 today and decreases 22 pips per day. Longer term traders should look to position short against 1.6746 in the coming days. 1.6350 is potential resistance as well (61.8% of 1.6746-1.5707).
Australian Dollar / US Dollar
The AUDUSD is a beast and keeps trucking higher. The pair has slightly exceeded the midline of its channel and traded to a new 2009 high again today. Levels that I suggested one watch were .9200, .9270, and .9325 (these are former support levels from 2008). These levels make a large zone where a reversal could occur. The pair has entered that zone today so interest is piqued. What is interesting as well is that price has now touched and slightly exceeded the line extended from the top of wave A and the June high. RSI (14 day) is above 74 but not as high as it was at that June high, when it was above 75 (divergence still exists).
New Zealand Dollar / US Dollar
The NZDUSD moved to a new high by 30 pips and focus in on .7535 and .7724 and the resistance zone that it forms. These levels are pivots from 2008.
US Dollar / Japanese Yen
The USDJPY (and Yen in general) is one of the few currency pairs that I have been in synch with the past several months. I presented a count yesterday, mentioning that the decline from 101.50 is simply not an impulse. Either a triangle or complex correction is underway since December 2008. The next leg should be up towards 101.50 (maybe even above). The USDJPY has broken above 90.43, confirming a short term double bottom. Favor the upside against 88.00 and target 92.50 (measured level) as a minimum short term target. Risk on longs can be moved to 88.80 and a measured objective is 92.86. There could be some supply at 91.73 (former support).
US Dollar / Canadian Dollar
No change from yesterday - 1.0317, which is the 61.8% extension of 1.3068-1.0782/1.1730, has been reached. 1.0375/1.0400 is short term resistance and a rally above 1.0527 would begin to suggest that a bottom is forming. Additional objectives are .9914 and .9444.
US Dollar / Swiss Franc
No change from yesterday - The USDCHF has dropped to a new low and is probably completing wave v of C (just as EURUSD is in the process of doing). 1.0037, the 100% extension of 1.2303-1.0367, is a potential reversal point.
Jamie Saettele publishes Daily Technicals every weekday morning, COT analysis (published Monday mornings), technical analysis of currency crosses on Monday, Wednesday, and Friday (Euro and Yen crosses), and intraday trading strategy as market action dictates. He is the author of Sentiment in the Forex Market. Follow his intraday market commentary at DailyFX Forex Stream.
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