The AUDUSD and NZDUSD present the clearest patterns. Both pairs have declined in 5 waves and rallied in 3 from their June 30th highs. The implications are US dollar bullish.
Euro / US Dollar
A triangle remains possible from above 1.4300, as does a flat (price would come under 1.3750). It is also possible that a significant top is in place above 1.4300. Near term structure is bearish against 1.4203. Short term Fibonacci resistance is at 1.4100.
British Pound / US Dollar
The drop below 1.6231 favors additional weakness below 1.5800. The rally from 1.5800 counts best as a 3 wave rally and 3 wave rallies occur in B or X wave positions, diagonals, and triangles. All of these are possible right now. The B or X wave interpretation seems most probable given the bearish EURUSD implications.
Australian Dollar / US Dollar
I wrote yesterday that “the decline from .8162 is an impulse (5 waves), which suggests that the larger decline has turned down.” As expected, a 3 wave advance has succeeded the 5 wave decline from .8162. Fibonacci resistance extends to .8050. A top and reversal is expected before .8162.
New Zealand Dollar / US Dollar
The short term NZDUSD pattern is the same as the short term AUDUSD pattern. The decline from .6555 is in 5 waves and 5 wave movements occur in the direction of the larger trend. The bulk of the 3 wave countertrend rally is most likely complete. There is potential resistance from Fibonacci at .6435.
US Dollar / Japanese Yen
The triangle continues to play out but there is an alternate bearish count in which the drop from 101.50 is a series of 1st and 2nd waves. 93.50 defines the trend (above is bullish and below is bearish). There is little else to say about the USDJPY at this point. One can not force analysis upon choppy, unclear market structure. Sometimes (this is that time), the correct decision is to do nothing and await clarity.
US Dollar / Canadian Dollar
The extent of the rally from 1.0782 almost assures that the entire decline from 1.3068 is complete. Additionally, the rally from 1.0782 is unfolding as an impulse. A small 2nd wave correction may be underway now (RSI divergence warns of a short term top). When that corrective decline occurs, I’ll look to buy the dip.
US Dollar / Swiss Franc
The USDCHF is still stuck in its 1.06-1.10 range. We are left with competing counts, shown with labels above, until a break of the range. If the trend has turned up, then 1.0700 should remain intact
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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