The EURUSD rally from yesterday's low reversed at the 50% retracement of the decline from 1.4350. Lower highs since 1.4375 indicate that the EURUSD may be in the early stages of a larger bear move.


Euro / US Dollar


Weakness from the top of the range may still be corrective but there is an alternate bearish count in which the rally to 1.4380 is wave C of an expanded flat. The rally from yesterday's low is a clear 3 wave affair (corrective) so favor the downside. A break of 1.4200 could see an acceleration of the decline in a 3rd wave.

British Pound / US Dollar



The bearish count is strong against 1.6629... Former support at 1.6274 is potential resistance near term. Focus is on 1.5980, which is a level that could produce a sizeable bounce. Only a break of 1.5800 would eliminate the range and clear the way for an extended decline.

Australian Dollar / US Dollar



As the AUDUSD nears its 2009 high, the bearish short term pattern has been called into question yet remained valid. A drop below .8151 would negate any bullish potential and open up a move to .7700.

New Zealand Dollar / US Dollar



Coming under .6640 would negate the blow-off top scenario that I have discussed in recent days and also mean that channel support (since March) has been broken. RSI divergence at multiple degrees of trend favors bears.

US Dollar / Japanese Yen



After a false break through channel resistance, the USDJPY is back below both the 55 and 200 day moving averages. The pair has failed at the 38.2% of the decline from 97.81. 93.00 is potential support and only a break below 91.73 would eliminate the larger range and give scope to a test of 87.00 and legitimate breakdown. Risk on shorts can be moved to 95.10.

US Dollar / Canadian Dollar



The rally from 1.0717 is impulsive (5 waves) and supports the expanded flat interpretation of price action since 8/12 that I proposed yesterday. A sharp decline this morning did find support from a former congestion zone. A break above 1.1000 shifts focus to 1.1130.

US Dollar / Swiss Franc



The USDCHF is in a similar situation to the EURUSD. Failure to stay above 1.0561 suggests that the USDCHF is headed for a test of the December 2008 low at 1.0367. However, the decline has failed to accelerate so wave C from 1.1973 may be complete. A rally above channel resistance would confirm a low.

British Pound / Japanese Yen



Bigger picture, the pair remains in a large range (146.70-163.00) and 150.00 is potential support before the range low. Former support at 153.50 is potential resistance as is potential trendline resistance drawn off of the 8/10 and 8/24 highs.


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 marketcommentary at DailyFX Forex Stream. Contact Jamie at jsaettele@dailyfx.com