-EURUSD lower end of range just below 1.31
-GBPUSD trades above 1.4990, negates triangle
-NZDUSD breaks short term support line
-USDJPY bearish below 100.80
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 Monday's high (1.3396) will remain intact. A push above there exposes potential trendline resistance just shy of 1.35. The critical level for bears though is 1.3586.
British Pound / US Dollar
I wrote yesterday that 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. We can eliminate the triangle count as the GBPUSD exceeded 1.4990. This favors a strong advance, possibly as high as 1.60. Price needs to remain above 1.4579 in order for the bullish structure to hold. Support is at 1.4812.
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 confirmation of a top yet. I'll alert readers at the earliest confirmation of a top with an alert at DailyFX.
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 at the high and has rolled over from overbought territory on the daily. Price ideally remains below .5939.
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 in the 5 wave rally from .9055). Staying above 1.2020 keeps this interpretation of the wave count on track. Confidence is low.
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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