-EURUSD trading above Fibonacci extension
-GBPUSD Fibonacci confluence at 1.6679-1.6830
-AUDUSD Fibonacci resistance at .8385
-NZDUSD Fibonacci confluence at .6555/80
-USDCAD Fibonacci support at 1.0588
Euro / US Dollar
The EURUSD rally from 1.2886 has slightly exceeded the level at which it would be equal to the 1.2454-1.3742 rally; which is 1.4174. Equality between waves a and c are common. The alternate, in which a larger complex correction will end above 1.4723, does remain valid. RSI divergence favors a top before 1.4723.
British Pound / US Dollar
There is no change to the bigger picture pattern in which the rally from 1.3500 is a 4th wave that will eventually be fully retraced. As mentioned last week although the rally is extended, there is no sign of a top yet. The next level of potential resistance is 1.6680-1.6830. This is a former 4th wave price extreme and 50% retracement of the decline from 2.0162. RSI is above 80 on the daily so beware of a pullback prior to completion of the larger advance.
Australian Dollar / US Dollar
Nothing has changed regarding long term bearish implications (5 wave decline from 2008 high indicates additional bearish potential and the corrective rally from .6000 confirms as much). RSI divergence along with mature wave structure at multiple degrees of trend (3 waves up from .6000, 5 waves up from .6245 and 5 waves up from .6950) favors a reversal. Like the GBPUSD, there are multiple warning signs that the pair will top but no evidence of a top yet. The next level to watch as potential resistance is the 61.8% of the decline from .9856, at .8385. Staying above .7740 keeps the near term trend pointed up. .7975 is potential short term support.
New Zealand Dollar / US Dollar
The NZDUSD rally from .5484 is nearing the point at which it would equal the .4890-.5987 rally; at .6581. This level is defended by the 50% retracement of the decline from .8220-.4890; at .6555. Look for a top and reversal near the Fibonacci confluence. Short term support is at .6360.
US Dollar / Japanese Yen
Failure to clear 93.50 and the rally above 96.75 shifts focus back to the triangle count (shown above...red line is 200 day SMA). Under this count, wave d (triangles unfold in 5 waves (a-b-c-d-e)) of a B wave triangle is underway towards 98-99.
US Dollar / Canadian Dollar
The 61.8% of the rally from .9055 to 1.3068 is at 1.0588 and is potential support. The speed of the decline from 1.1820 and the RSI extreme make it likely that the decline is a 3rd wave. As such, favor some consolidation this week before a drop to a new low to complete wave v of C. 1.0950 is resistance.
US Dollar / Swiss Franc
The USDCHF count is the same as the EURUSD count (but as the inverse). There are 2 competing counts, one that calls for formation of a low prior to 1.0367 and one that gives scope to a drop below 1.0367 before a bottom and reversal. In the case of the latter, the current decline would be wave 3 of C and would extend from near current price. With this in mind, the next few days should provide clarification.
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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