The EURUSD resistance zone from 1.4325 to 1.4316 should contain any post FOMC spikes. This is a high reward/risk bearish set up.
Euro / US Dollar
I wrote yesterday that a correction; back to at least 1.4223 and possibly 1.4300 will present an opportunity to sell the EURUSD with a stop above 1.4452. That correction could be unfolding as a flat, which could lead to a spike below 1.4100 in wave B before wave C exceeds 1.4185. Be cognizant of this if attempting to sell a break of yesterday's low. Bottom line though is that the larger EURUSD trend has turned turn and rallies should be sold. That rally is playing out now. Fibonacci resistance extends to 1.4319.
British Pound / US Dollar
The GBPUSD break above 1.6750 was from a triangle and thrusts from triangles are terminal (meaning that they complete larger degree moves). The next chart support is 1.6340. Near term, the decline from the top is most likely a first wave. A second wave correction is underway now and could reach as high 1.6700/1.6800 (Fibonacci resistance).
Australian Dollar / US Dollar
The AUDUSD has broken above its June high, confirming that wave C (as well as the entire rally from the October low) is in its final stages. We have yet to see the degree of weakness from the top that is evident in the EURUSD and GBPUSD but RSI divergence as well as the patterns in the EURUSD and GBPUSD do warn of a reversal. Potential resistance is at .8330.
New Zealand Dollar / US Dollar
The NZDUSD is in the same position as the AUDUSD. The break to a 2009 high indicates that wave v of C is underway and possibly complete. Although anticipating a reversal, there is no evidence of one yet. A drop below .6467 would suggest that a top is in place.
US Dollar / Japanese Yen
The USDJPY has been violent lately - moving quickly in both directions. Last week's spike has nearly been entirely retraced. The decline from 97.81 is impulsive, suggesting that the trend is indeed down. Fibonacci resistance extends to 96.78.
US Dollar / Canadian Dollar
The entire rally from 1.0782 has now been retraced. However, the drop below 1.0782 may be wave Y in a complex W-X-Y corrective decline from 1.3068. Daily RSI has turned up from oversold (which was also divergent with the low). The USDCAD rally has picked up steam and cleared initial resistance at 1.0940. The advance has the characteristics of an impulse so a decline should be bought against 1.0631. 1.0800/50 is at the support zone.
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, the rally from 1.0561 confirms a reversal (5 waves). Fibonacci support extends to 1.0686.
British Pound / Japanese Yen
The GBPJPY decline from 163.15 is an impulse - indicating with a high degree of probability that the trend is down. A corrective advance is underway now and resistance extends to 160.37. Watch for potential resistance from the underside of the former support line that was recently broken.
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. Follow his intraday market commentary at DailyFX Forex Stream.
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