Dollar weakness has been met with strong demand and the next level for USD bulls (EURUSD bears) is 1.4000. A drop below there opens up 1.3750. In the event that 1.4150 fails to hold, resistance extends to 1.4220. Bears are firmly in control against 1.4330.
Euro / US Dollar
I remain bearish against 1.4330 as the short term pattern in the EURUSD strongly suggests that the longer term decline has resumed.” The drop below the diagonal support line (wave v of C ending diagonal) opens up the door for a move to 1.3750 over the next several days. In the event that last night’s high fails to hold, resistance is at 1.4210/20.
British Pound / US Dollar
Staying below 1.6672 keeps the GBPUSD on a path lower towards 1.6000 and 1.5800. Today’s high has been resisted by short term trendline resistance. A push above there exposes Fibonacci resistance at 1.6520.
Australian Dollar / US Dollar
The decline from .8484 is in 5 waves, suggesting with a high probability that the larger trend has turned down. .8271-.8317 is the area of the former 4th wave, which is usually strong resistance. Resistance extends to the 61.8% at .8357. Support is not until .7700.
New Zealand Dollar / US Dollar
I wrote last week that “the rally from .6193 (wave 5) may be unfolding as a diagonal. If this is the case, then price will poke above .6823 prior to reversing.” Failing just shy of the mentioned line, the NZDUSD has indeed reversed sharply. Rallies should be sold. The rally from .6640 has entered the Fibonacci zone, which extends to .6800.
US Dollar / Japanese Yen
The USDJPY has bounced from support just shy of 94.00. I’d rather sell rallies at this point, given the signs of a reversal in equities. Resistance extends to 95.50 and the trend is considered down against 96.80.
US Dollar / Canadian Dollar
The USDCAD is breaking higher. Structure is bullish against 1.0791 and a short term target is 1.1517 (161.8% extension of 1.0631-1.1080 rally). There is potential short term resistance at 1.1230 (100% extension and former resistance).
US Dollar / Swiss Franc
The USDCHF pattern is the same as the EURUSD pattern (but as the inverse). Wave C within the A-B-C corrective decline from 1.2303 may be truncated and therefore complete. Trading above 1.0939 would confirm the reversal. Near term, price ideally stays above 1.0670.
British Pound / Japanese Yen
The GBPJPY has bounced from near the 100% extension of the decline from 163.15-155.96. With 2 equal legs down from 163.15, it is possible that the decline is a completed correction. However, the entire rally from the January low is corrective and may be complete. As such, I favor selling rallies against 160.44 in anticipation of an extended decline. A short term (several days) target area is just above 149 and there is potential resistance at 157.73 (on a rally above 156.90).
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) and the DFX Trend Index every day after the NY close. He is also the author of Sentiment in the Forex Market. Follow his intraday market commentary at DailyFX Forex Stream. Contact Jamie at email@example.com