-EURUSD trades sideways...looking to sell a break higher
-GBPUSD ending diagonal?
-NZDUSD searching for a top
-USDJPY threatening 99
Euro / US Dollar
As mentioned yesterday, the preferred count treats the advance from 1.2510 as an expanded flat as a second wave. In flats, c waves are impulses (5 waves). A push above 1.3742 would make the advance from 1.2454 an impulse and give way to a top and reversal. Expect resistance at the confluence of the 200 day SMA / 61.8% of the decline from 1.4723 at 1.3835/50.
British Pound / US Dollar
Bigger picture, expectations are for a c wave to end above 1.50. The path that price takes to get there I am unsure of however. One possibility is that the GBPUSD exceeds 1.50 while remaining above 1.4390 in what most likely ends up as a 5th wave diagonal. The implications from a short term head and shoulders pattern destroy my confidence in the bullish count though.
Australian Dollar / US Dollar
Price action in the AUDUSD since the October 2008 low has carved out what could be a head and shoulders continuation pattern. This is pure speculation at this point but the ‘look’ is there. For the last 3 days, the pair has been testing the left shoulder level. A rally above .7093 may present an opportunity to go short against .7275.
New Zealand Dollar / US Dollar
The NZDUSD is in a position similar to that of the AUDUSD. There is a count in the NZDUSD that calls for a wave 2 high to form before .6090. If this is to occur, then a high should form within the next few days. I wrote yesterday that “short term structure favors a push above .5753 in order to complete wave c of an expanded flat (just like the EURUSD).” The NZDUSD reached .5800 today, so it is possible that a top is in place but I’d like to see near term weakness before going short. It rarely pays to jump in front of a moving train.
US Dollar / Japanese Yen
The longer term USDJPY decline may have resumed. The advance from 87.09 is in 3 waves and price has dropped below the wave A high at 94.67, confirming that the decline is in 3 waves (and can not become an impulse). Favor the downside as long as price is below 99. Above there and the USDJPY likely tests the 200 day SMA just below 100.
US Dollar / Canadian Dollar
The drop below 1.2350 negates the previously held bullish bias. The USDCAD did exceed its wave 3 terminus on March 9, so it is possible that that advance completed wave 5 within a 5 wave advance from the 2007 low. Price has also dropped beneath its 55 day SMA, which favors bears.
US Dollar / Swiss Franc
Watch for USDCHF support from Fibonacci all the way down to 1.0925. The decline from 1.1973 is wave C of a flat (an extremely violent flat at that) that should lead to formation of a secondary low (primary low was 1.0367) in the next few weeks… possibly even within the next few days.
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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