-EURUSD should break below false channel soon
-GBPUSD at short term resistance line
-Keep USDJPY bearish risk at 99.75
-USDCAD tests 1.25
Euro / US Dollar
Structure on the daily is clear thus I maintain that a 3rd of a 3rd wave is down within the 5 wave decline from 1.60. Risk can be moved to 1.3273. A short term Fibonacci extension at 1.27 is a short term bearish target (long term target is much lower). I expect a break below the false channel soon. RSI on the 240 minute chart is just above the oversold level. If this is a 3rd of a 3rd wave, then RSI should fall into oversold territory and stay there for a while.
British Pound / US Dollar
Cable has dropped beneath 1.4579 as well as a support line that had held since early March. The downside is favored and the next potential chart level support is not until 1.4110. At the current juncture, the GBPUSD is at a short term resistance line. A push above there exposes a congestion area that begins at 1.4700. Structurally, a flat could be complete at 1.5072 as a 4th wave (and price is heading lower for a break beneath 1.35).
Australian Dollar / US Dollar
I wrote Friday that “RSI has dropped from above 70 and broken its own trend. There is enough evidence to suggest that the entire advance from .60 is complete in the guise of a complex correction (W-X-Y).” So far, weakness is confirming that a top is indeed in place. It is time to let the waves play out.
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. Similar to the AUDUSD, NZDUSD weakness suggests that an important top is in place. I’ll attempt to identify completions of any corrective advances.
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 103.35 this week and decreases about 20 pips per week. The long term trend remains down and I am looking for a resumption of that trend. The downside potential is significant. Bears can move risk to 99.78.
US Dollar / Canadian Dollar
I am presenting a slightly relabeled count on the USDCAD. The implications are bullish as this count anticipates wave 5 within the advance from .9055. The decline from 1.3068 is in 3 waves (to this point) and has found support at the 4th wave of one less degree (1.2020). I wrote Friday that “additional weakness should find support at 1.1861 (100% extension) but it is also possible that a low is already in place at 1.1976.” Near term, a short term impulse may be complete or close to complete. If so, then a corrective decline should unfold down to at least 1.2330.
US Dollar / Swiss Franc
Like the EURUSD, the USDCHF has most likely resumed its longer term trend towards USD strength. This is my working assumption as long as price is above 1.1144. There is potential short term support near current price at 1.1640.
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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