-EURUSD sell zone is 1.3415/50
-AUDUSD topping process
-NZDUSD already topped
-USDCAD long opportunity
Euro / US Dollar
My working assumption is that a wave 2 high is in place at 1.3740 (within what will be a 5 wave decline from 1.4723). It is quite possible that 1.3740 will be the high for the year. Near term, a corrective rally may be underway from 1.3113. Expectations are for the rally to exceed 1.3343 (yesterday's high) and top in the 1.3415-1.3450 zone. 1.3415 is former support that should now provide resistance.
British Pound / US Dollar
Price action since 1.35 is a 4th wave that will end as either a triangle or flat. I wrote last week that since it looks as though the EURUSD long term decline has resumed, a triangle (see arrows) is more likely. IF a triangle is underway, then wave D is working lower towards 1.40 now. Cable is following the triangle path...we'll look for it to play out. It is unlikely that I'll advocate trades in the GBPUSD for a number of weeks since the pair is in a large degree correction.
Australian Dollar / US Dollar
Price action in the AUDUSD since the October 2008 low has carved out what could be a head and shoulders continuation pattern. This is pure speculation at this point but the ‘look' is there. For the last 3 days, the pair has been testing the left shoulder level. Staying below .7050 keeps the short term trend pointed lower. I see 5 waves down from .7093, a top in AUDUSD will be confirmed.
New Zealand Dollar / US Dollar
I wrote last week that there is a count in the NZDUSD that calls for a wave 2 high to form before .6090. If this is to occur, then a high should form within the next few days. Short term structure favors a push above .5753 in order to complete wave c of an expanded flat. Kiwi is 200 pips off of the high and price has broken below a short term support line. Bears can move risk to .58 (last week's high) and short term resistance is at .5670-.5715. Bolstering the bearish case is the short term head and shoulders formation and price ideally remains below .5740.
US Dollar / Japanese Yen
The USDJPY is the epitome of frustration. After surging through 99, the pair kissed off of the 200 day SMA and has turned down. The long term wave structure is bearish, as evidenced by the break from the triangle on the monthly chart as well as the advance from 87.09 being in 3 waves. However, there are bullish implications from a short term head and shoulders inverse pattern. With signals mixed, I prefer to stand aside.
US Dollar / Canadian Dollar
The short term USDCAD pattern suggests that we should be long, albeit at a better price. There are 5 waves up from 1.22, therefore expect a corrective decline over the next few days back to at least 1.25. Look to positions long against 1.22 in anticipation of a break to yearly highs.
US Dollar / Swiss Franc
Like the EURUSD, the USDCHF may have resumed its longer term trend towards USD strength. Near term, bulls are in control as long as price is above 1.2222. Price is nearing former resistance at 1.1350, which should now hold as support.
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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