-EURUSD decline in 3rd wave
-GBPUSD breaks 1.4579
-AUDUSD and NZD declines accelerate
-USDJPY risk moved to 99.78
-USDCAD low in place too?
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). Potential resistance levels where traders may wish to add to short positions are 1.3080 and 1.3120.
British Pound / US Dollar
I wrote Friday that structure is bullish as long as price is above 1.4579 but that it is possible a flat is complete at 1.5068. Confidence in direction is low. Divergence with MACD at recent highs along with the indicator about to drop beneath the zero line favors bears. 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.
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). Today's sharp decline confirms my suspicions that .7331 was the end of a corrective advance. The next potential support level is .6765.
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. MACD slope is negative but the indicator remains elevated on a relative basis, signaling that bearish potential is significant.
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. Today's advance suggests that 1.1976 was the low. Look to buy dips against that level.
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 1.1395. The advance is accelerating, this reinforcing my bullish view.
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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