Technicals

Euro Short Term Bearish Target at 1.4450

Euro / US Dollar

Having come under a short term channel midline (at least temporarily), EURUSD weakness is confirming our suspicion that an important top is in place.  1.4410/50 is the level at which a bounce has a high probability of materializing.

British Pound / US Dollar

The GBPUSD nearly reached 1.5750 last night.  Former support is now potential resistance at 1.5915, 1.5980, and 1.6020.  An extended decline could reach 1.5284 (161.8% extension of 1.7047-1.6111).

Australian Dollar / US Dollar

It is worth noting that the rally from .6245 is now exactly double the size (in price) as the .6005-.7275 advance.  A and C waves sometimes relate to each other by factors of .618, 1, 1.618 or 2.  Short term channel support has been broken.  Target former resistance levels of .8484 (near lower end of longer term channel) and .8270.

New Zealand Dollar / US Dollar

The topline of a channel since July and the midline of a channel since March have rejected the NZDUSD advance.  A short term support line is failing now.  A daily close below there would expose the lower boundaries of the two channels and then former resistance at .6900.

US Dollar / Japanese Yen

Keep the long term outlook in perspective – “a 4th triangle ended in 2007 above 124.00 therefore the decline from that level is viewed as a 5th wave that will not be considered complete until price drops to an all-time low (below the 1995 low near 80).”  Look to sell rallies into former support (now likely resistance), which is 90.10/34.  Bears are firmly in control below 91.65.

US Dollar / Canadian Dollar

Last week, I wrote of “the short term pattern, which could be an inverse head and shoulders in the making” mentioning that “trade above the neckline, near 1.0800, would present an opportunity to target 1.1100.”  The USDCAD has broken above the neckline, which could serve as support in the event of a sizeable retracement.  Potential support prior to that is 1.0860.

US Dollar / Swiss Franc

The USDCHF doesn’t have the reversal characteristics of the other USD pairs (EURUSD and NZDUSD reversing from channels, AUDUSD breaking channel support, GBPUSD large h&s, USDCAD short term h&s) but the wave count warns (and has been warning) of a significant low.  Trading through the top of channel resistance would be confirmation of a low.

Jamie Saettele publishes Daily Technicals every weekday morning, COT analysis (published Monday mornings), technical analysis of currency crosses on Monday, Wednesday, and Friday (Euro and Yen crosses), and intraday trading strategy as market action dictates.  He is the author of Sentiment in the Forex Market.  Follow his intraday market commentary at DailyFX Forex Stream.

Contact Jamie at jsaettele@dailyfx.com if you would like to receive his reports via email.