Foreign Exchange Markets, Technicals

British Pound Holding Support Line

Euro / US Dollar

The bearish count remains on track and the next supports are 1.4775 and 1.4735.  Until the EURUSD trades below 1.4625, the uptrend remains intact (channel support).  A higher 5th wave would probably finish in the 1.5280/1.5330 area (1.5280 is former support and 1.5330 is a measured objective).  Near term, coming under 1.4820 could complete 5 waves down from 1.5053.  However, I don’t want to get cute with short term counts when much larger potential moves exist (a break below 1.4820 could signal an extended 3rd wave for example).  Staying below 1.5020 keeps the bearish count valid.

British Pound / US Dollar

The GBPUSD has been in a consolidation mode since late May.  Price has traded in a wide 1300 pip range since then in what could be corrective (continuation of strength) or distributive (reversal of strength).  A support line drawn off of the 10/13 and 11/3 lows has held.  1.6710 is short term resistance.  At this point, I do not see a clear trade although it should be noted that shorting does not look wise as long as the support line is intact.

Australian Dollar / US Dollar

Yesterday’s outside bearish reversal warrants attention following a 12 month high.  The next AUDUSD objective would be .9680 (where wave .v = wave .i).  This level intersects channel resistance on November 25.  Keep in mind that the rally above .9335 satisfies minimum expectations for wave .v.  .9205/45 is potential support and coming under .9125 would be bearish (suggestive of a top).

New Zealand Dollar / US Dollar

NZDUSD price pattern is bearish against .7640.  The decline from .7640 is impulsive and the rally from under .7100 is unfolding as a correction with wave b as a triangle.  In the event of additional strength, .7500/20 is resistance.

US Dollar / Japanese Yen

The bigger picture pattern is constructive. Either a triangle or complex correction is underway since December 2008.  The next leg should be up towards 101.50 (maybe even above).  One possibility from 88.00 is a leading diagonal as either larger wave A or 1 from 88 to 92.35.  A larger B or 2nd wave is underway from 92.35.  That correction may be complete at the ‘panic low’ that occurred two Sunday evenings ago.  Still, the USDJPY has traded sideways since then so one must consider the possibility of a triangle since 89.17.  88.70 is potential support on a drop below 89.17.

US Dollar / Canadian Dollar

The bigger picture pattern is constructive. Either a triangle or complex correction is underway since December 2008.  The next leg should be up towards 101.50 (maybe even above).  One possibility from 88.00 is a leading diagonal as either larger wave A or 1 from 88 to 92.35.  A larger B or 2nd wave is underway from 92.35.  That correction may be complete at the ‘panic low’ that occurred two Sunday evenings ago.  Still, the USDJPY has traded sideways since then so one must consider the possibility of a triangle since 89.17.  88.70 is potential support on a drop below 89.17.

US Dollar / Swiss Franc

The USDCHF is in the exact same position as the EURUSD (just as the inverse).  The bullish count remains valid against the low (1.0030).  1.0200 and 1.0250 are short term resistance levels.

Jamie Saettele publishes Daily Technicals every weekday morning, COT analysis (published Friday evenings), 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 and trades at DailyFX Forex Stream.  Send requests to receive his reports via email to jsaettele@dailyfx.com.