Euro Struggling to Extend Gains is a Red Flag

By Roger Baettig | August 07 2012 1:00 PM

Be careful with the EURUSD up here as it presses against resistance from late June lows. The 100% extension of the rally from the low looms at 12481 along with channel resistance over the next few days. While the EURUSD may extend into 12550 or even 12750, it's unlikely that the path taken is directly from here. See the technicals for additional explanation. 12290 is support.

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The big mover today is the Yen, which is down across the board. The bullish setup from the key reversal on the first day of the month remains in place and focus remains on former support at 7920 and the 61.8% retracement of the decline from 8062 at 7958. I do have my doubts as to the longer term bullish potential for the USDJPY given the 3 wave advance from 7765.

The EURJPY and EURAUD, which we've focused on in recent days, are working and focus remains higher.

EURUSD - Daily Bars

Euro_Struggling_to_Extend_Gains_is_a_Red_Flag_body_eurusd.png,

Prepared by Jamie Saettele, CMT

USDJPY - Daily Bars

Euro_Struggling_to_Extend_Gains_is_a_Red_Flag_body_usdjpy.png,

Prepared by Jamie Saettele, CMT

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