-EURUSD to exceed 1.3742 this week
-GBPUSD significant top may be in place
-AUDUSD and NZDUSD nearing end of rallies
-USDJPY bearish pattern
-USDCAD bounce underway

Euro / US Dollar

Near term, higher prices do lie ahead for the EURUSD. Remember, the advance from 1.2886 is the final leg of the correction from the October 2008 low. A push above 1.3742 would satisfy the minimum requirement for wave Y, at which top I will expect a top and reversal. Being a complex correction, I am not positive as to the structure of the rally from 1.2886. However, one possible count is an a-b-c flat (3-triangle-5) with wave b as a triangle. Staying above 1.3471 keeps the near term trend pointed higher (move risk to there) and place a target at 1.3750. A rally above 1.3671 would complete an impulse from 1.3251 and possibly complete the entire rally from October.

British Pound / US Dollar

In a technical alert at DailyFX on Thursday, I wrote that the GBPUSD low today (just a few hours ago) occurred right at Elliott channel support. Elliott channeling is a technique that is used to identify wave 4 lows - among other significant points...the implications are bullish as wave 5 may be underway now towards 1.5300 (wave 5 = wave 1 at 1.5300). The GBPUSD has slipped from a high of 1.5269 today, strongly suggesting that 5 waves from 1.4396 are complete. Furthermore, the entire rally from 1.35 may now be complete as a 4th wave correction. Near term resistance is at 1.5131 and a bearish bias is warranted against 1.5269.

Australian Dollar / US Dollar

The rally from .6953 is wave v of C and the objective at .7630 has already been reached (which is where wave v of C would equal wave i of C). the 50% retracement of the decline from .9822 at .7693 is giving bulls fits for now but one more high seems likely this week. Higher RSI on the 240 minute chart suggests that the top is not yet in place (tops almost always occur with momentum divergence). Expect support near .7503.

New Zealand Dollar / US Dollar

Likewise, a new high is likely in the NZDUSD this week. Wave structure along with the RSI condition explained in the AUDUSD analysis suggests as much. The drop from .6132 is a 4th wave that should find support near .5890-.5930. This zone is defined by the price extreme of the 4th wave of one less degree (Elliott guideline) and the 38.2% retracement of the rally from .5624 (a 3rd wave rally). In the above count, I am treating wave 1 as a leading diagonal. Watch the Elliott channel for support as the week progresses.

US Dollar / Japanese Yen

The long term trend remains down and I expect a resumption of that trend although there is near term upside potential. A potential head and shoulders top that is evident. The USDJPY has dropped beneath the 200 day SMA, suggesting that the decline has resumed.

US Dollar / Canadian Dollar


A larger USDCAD decline is underway. Fibonacci support begins at 1.1359, which price is closing in on, and extends all the way to 1.0400. In other words, there is significant bearish potential. Near term, 5 waves down from 1.2510 are probably complete so a correction, back to at least 1.1768 (former 4th wave price extreme) is expected. As the correction plays out this week, I'll look to identify the top.

US Dollar / Swiss Franc

The USDCHF decline is also likely to extend. 1.0925 is the 61.8% of the advance from 1.0367 and potential support. Staying below 1.1240 keeps the pair on a path lower.

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.

Please send comments about this report to jsaettele@dailyfx.com