The EURUSD rally above 1.4330 negates the previously held bearish bias. Generally speaking, the pair remains in a large range but the chances of a breakdown now look slim. The USDCHF broke to a new 2009 low, possibly foreshadowing what is in store for the EURUSD (2009 high?).
Euro / US Dollar
The EURUSD rally above 1.4330 negates the bearish bias and makes it unlikely that a top is in place. The support zone is now 1.4200/80. A drop into this zone would warrant consideration of long positions for a break above the 2009 high and potential test of 1.4720.
British Pound / US Dollar
Staying below 1.6672 keeps the GBPUSD on a path lower but given EURUSD price action, short positions are a dicey proposition. In the event of a move through 1.6672, focus would shift to 1.6720 and 1.6837. Potential short term support is at 1.6540.
Australian Dollar / US Dollar
The decline from .8484 is in 5 waves, suggesting that the larger trend has turned down. However, the AUDUSD has exceeded all levels of potential resistance (including the 61.8% retracement). This and the EURUSD rally above 1.4330 makes me skeptical of the bearish AUDUSD pattern.
New Zealand Dollar / US Dollar
Same story regarding the NZDUSD. The failure ahead of the ending diagonal resistance line is bearish but the acceleration in the NZDUSD rally from channel support is clearly not bearish. Still confined to a range for now, there is little confidence in the bearish pattern.
US Dollar / Japanese Yen
The short term pattern is not especially clear but the false break above channel resistance and price again below the 200 day SMA keeps me looking lower. The moving average at just above 94 is potential resistance as is the August 18th high at 95.30.
US Dollar / Canadian Dollar
The drop below 1.0791 leaves the rally from 1.0631 in 3 waves and suggests that the USDCAD is probably headed to a new 2009 low. Resistance is 1.0860/1.0950 going forward.
US Dollar / Swiss Franc
Failure to stay above 1.0561 suggests that the USDCHF is headed for a test of the December 2008 low at 1.0367. Dropping below there would possibly complete a 3 wave drop from 1.2303. A target is near parity (1.0037 is the 100% extension).
British Pound / Japanese Yen
A triangle may be unfolding since the low was made at 153.44. Triangles are continuation patterns so favor a break below 153.44 before a more important low forms. Short term resistance is at 156.80 and price ideally remains contained by the resistance line drawn off of the August 10th, 13th, and 20th 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 market commentary at DailyFX Forex Stream. Contact Jamie at firstname.lastname@example.org