Euro Bullish against 1.3260



Thu, 07 May 2009 10:35:44 -0400



By Jamie Saettele, Senior Currency Strategist strategist@dailyfx.com




-EURUSD breaking out
-AUDUSD approaching 50% retracement
-NZDUSD breaks to new 2009 high
-USDCAD wave structure suggests rebound

2009.05.07_tech_1

Euro / US Dollar

2009.05.07_tech_eur

Bullish structure has held and the EURUSD is breaking to new highs.  Price is approaching the 200 day SMA but there is no chart resistance until 1.3586.  Keep risk to 1.3251 although at this point, price should not come near that level.  In the event of a setback, 1.3350-1.3390 is potential support.  The objective remains above 1.3742 and in the 1.4100-1.4200 area. 

British Pound / US Dollar

2009.05.07_tech_gbp

Cable continues to advance as well.  Staying above 1.4776 keeps bulls in control and Cable on a path towards 1.5378 and perhaps 1.5728 (200 day SMA near there as well).  Short term support is at 1.4950.       

Australian Dollar / US Dollar

2009.05.07_tech_aud

The rally from .6953 is wave v of C and the objective at .7630 was nearly reached this morning (which is where wave v of C would equal wave i of C).  This is close to the 50% of the decline from .9822.  Divergence with RSI warns of a top within the next few weeks.  Short term structure does not look complete but the rally is in its final stages. 

New Zealand Dollar / US Dollar

2009.05.07_tech_nzd

I wrote yesterday that “on the daily today, I am highlighting how wave C of an A-B-C advance from the low may be underway.  Under this count, the NZDUSD would exceed .60 and potentially reach .6340 or .6740 in the next few months.”  Having broken the wave A high today, this count is confirmed.  .6340 is the objective and there is potential support at .5850.  Price should remain above .5782.

US Dollar / Japanese Yen

2009.05.07_tech_jpy

The long term trend remains down and I expect a resumption of that trend although there is near term upside potential.  A potential head and shoulders top that is evident.  Coming back beneath the 200 day SMA would begin to suggest that the decline has resumed. 

US Dollar / Canadian Dollar

2009.05.07_tech_cad

A larger USDCAD decline is underway towards 1.1359 and perhaps even lower.  Near term, 5 waves down from 1.2510 may be near completion.  As such, there is risk of a correction, back to at least 1.1830.  If a correction plays out, then we’ll have a shorting opportunity.  Notice RSI on this chart, which warns of a bounce. 

US Dollar / Swiss Franc

2009.05.07_tech_chf

The USDCHF decline is also likely to extend.  1.0925 is the 61.8% of the advance from 1.0367 and potential support.  Staying below 1.1421 keeps the pair on a path lower.  1.1315-1.1350 is resistance in the event of a corrective bounce.

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.
 
Please send comments about this report to jsaettele@dailyfx.com


DailyFX provides forex news on the economic reports and political events that influence the currency market. Learn currency trading with a free practice account and charts from FXCM.