-EURUSD resistance line at 1.35 if needed
-GBPUSD tests top of range
-USDJPY possibly resuming long term decline
-USDCHF holding 200 day SMA
Euro / US Dollar
The fractal nature of the market has been on full display in the EURUSD since the top last year at 1.60. There are 5 waves down and 3 waves up at 2 degrees of trend. The ‘1-2' down from 1.4723 is waves 1 and 2 of the next 5 wave decline. Since 1.3742, the EURUSD has made lower highs and lower (albeit slightly) lows. There is no reason to alter the bearish outlook. It is unclear if yesterday's high (1.3396) remains intact. A push above there exposes potential trendline resistance just shy of 1.35. The critical level for bears though is 1.3586. Potential short term support today is 1.32 (short term Fibonacci).
British Pound / US Dollar
Price action since 1.35 is a 4th wave that will end as either a triangle or flat. IF a triangle is underway, then wave D is working lower towards 1.40 now. With price so close to the top of the range, confidence is low in the triangle at this point. Trading above 1.4962 could lead to a strong break out rally. This is at odds with the bearish EURUSD structure but markets do tricky things.
Australian Dollar / US Dollar
As mentioned recently, a push above .7275 could complete a complex correction from .60. Either way, I am looking to go short. The rally through .7275 exposes the 100% extension of .6005-.7275 at .7566. A top could form prior to that level but there is no such evidence yet. Risk is shifting to the downside.
New Zealand Dollar / US Dollar
There are 5 waves down from that .6090, indicating that the long term trend remains down. An expanded flat correction has unfolded from the February 2 low (.4958). Wave c is in 5 waves, RSI is divergent and in overbought territory. Weakness is expected.
US Dollar / Japanese Yen
The 61.8% of 110.71-87.09 at 101 has held as USDJPY resistance. The next level of potential resistance is a resistance line drawn off of the July 2007 and August 2008 highs. That line is at 103.55 this week and decreases about 20 pips per week. However, with price trading below a parallel support line AND COT data warning of a sentiment extreme, it is worth punting on a short against 100.76. The long term trend remains down and I am looking for a resumption of that trend. The downside potential is significant.
US Dollar / Canadian Dollar
The USDCAD is testing a line drawn off of the November and February lows. It is possible that the decline from 1.3068 is a small 2nd wave (wave ii of 5 within the 5 wave rally from .9055). Staying above 1.2020 keeps this interpretation of the wave count on track.
US Dollar / Swiss Franc
Like the EURUSD, the USDCHF may have resumed its longer term trend towards USD strength. This is my working assumption as long as price is above 1.1238.
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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