Foreign Exchange Markets
Australian Dollar Continues to Firm
March 10, 2010 at 1:52 pm by Jamie Saettele · Leave a Comment
Euro / US Dollar
A larger EURUSD rally, probably a 4th wave, may be underway towards 13870-14030. 4th waves are often choppy, usually flats or triangles. An impulsive rally from 13433 and corrective decline from 13738 may be complete. I cautiously favor the upside against 13530.
British Pound / US Dollar
After meeting resistance from former support / the 38.2% of the decline from 15825 / channel resistance, the GBPUSD has rolled over. I favor a drop below 14780 in a 5th wave. Risk can be moved to 15200. 15030 is resistance.
Australian Dollar / US Dollar
The AUDUSD is firm and while I am bigger picture bearish against 9334, the AUDUSD could continue to strengthen near term. 9170 and 9300 are potential resistance levels. A drop below 9050 is needed in order to suggest that the larger trend has turned back down.
New Zealand Dollar / US Dollar
As mentioned yesterday, it seems likely that the NZDUSD will exceed 7088 before the corrective advance from 6804 is complete. Price above 6959 keeps the NZDUSD on a path higher towards 7156. Action since 7088 could also be a triangle. 7015/30 is short term support.
US Dollar / Japanese Yen
Given the extent and structure of the USDJPY advance from 8813, it is possible that an A-B-C decline is complete from 9380. A move above 9217 would strongly suggest that the USDJPY is headed above 9380, which would indicate a breakout above trendline and channel resistance.
US Dollar / Canadian Dollar
No change: “The USDCAD has dropped below 10368 and to its lowest level since mid January. The potential for a bottom and reversal remain, especially since the decline from 10577 is now 161.8% of the decline from 10684-10491 and the decline from 10684 is 100% of the decline from 10784. Even if the decline from 10577 is a 3rd wave (rather than a c wave), a 4th wave correction would probably reach at least 10368.”
US Dollar / Swiss Franc
No change: “The decline from the 10900 high February can be counted as a 3 wave setback and the rally from the low (10646) may be an impulse. The other count is a double zigzag (a-b-c-x-a-b-c). Confusion reigns at this point and the key levels are 10646 and 10900. Until one of those levels gives way, the market remains in a range.”
Gold
No change: “Gold has traded sideways since December and appears to be building a bullish base. Specifically, the base could be a complex head and shoulders (the head itself is a head and shoulders). In order to complete the pattern, gold would sell off once more towards 1075 before finding a right shoulder low.”
Light Crude
Crude remains strong and the larger trend is considered up as long as price is above 6859 (under there completes a longer term head and shoulders top). Still, at least a setback looks likely near term as there are 5 waves up from the February low (and wave v is a diagonal). 8286-8350 is potential resistance from a gap. Expect weakness to at least below 7705. 7613 is potential support. It is possible that the rally from the February low completes wave C of an A-B-C flat. An impulsive decline from near current price would confirm as much.
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 at the DailyFX Forum. 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 tojsaettele@dailyfx.com.
British Pound Testing Potentially Strong Resistance
March 8, 2010 at 12:31 pm by Jamie Saettele · Leave a Comment
Euro / US Dollar
A larger EURUSD rally, probably a 4th wave, may be underway towards 13870-14030. 4th waves are often choppy, usually flats or triangles. An impulsive rally from 13433 and corrective decline from 13738 may be complete. This is bullish but I am uncomfortable with long positions at this point with equities testing key resistance levels (another view is presented with the USDCHF).
British Pound / US Dollar
The GBPUSD has met resistance from former support / the 38.2% of the decline from 15825, at 15181. Channel resistance reinforces resistance at the current level. I am looking for a turn lower in a 5th wave. Price should not come close to 15533.
Australian Dollar / US Dollar
The AUDUSD is nearing 9148, which is where the rally from 8796 would sport 2 equal legs. 9170 would be additional resistance. 9050 is potential short term support. A drop below 8974 is needed in order to suggest that the larger trend has turned back down.
New Zealand Dollar / US Dollar
I wrote last week to “favor the downside against 7022. A move above there would probably give way to strength above 7088 and a test of 7156.” The NZDUSD has exceeded 7022 and short term support is 6940/80. Action since 7088 could also be a triangle.
US Dollar / Japanese Yen
The USDJPY rally has reached the 61.8% retracement of the decline from 9217. This level is reinforced by former support. Given the extent and structure of the advance, it is certainly possible that an A-B-C decline is complete from 9380. Expect consolidation / pullback. Initial support is 90.
US Dollar / Canadian Dollar
The USDCAD has dropped below 10368 and to its lowest level since mid January. The potential for a bottom and reversal remain, especially since the decline from 10577 is now 161.8% of the decline from 10684-10491 and the decline from 10684 is 100% of the decline from 10784. Even if the decline from 10577 is a 3rd wave (rather than a c wave), a 4th wave correction would probably reach at least 10368.
US Dollar / Swiss Franc
The decline from the 10900 high February can be counted as a 3 wave setback and the rally from the low (10646) may be an impulse. The other count is a double zigzag (a-b-c-x-a-b-c). Confusion reigns at this point and the key levels are 10646 and 10900. Until one of those levels gives way, the market remains in a range.
Gold
No change: “Gold has traded sideways since December and appears to be building a bullish base. Specifically, the base could be a complex head and shoulders (the head itself is a head and shoulders). In order to complete the pattern, gold would sell off once more towards 1075 before finding a right shoulder low.”
Light Crude
Crude remains strong and the larger trend is considered up as long as price is above 6859 (under there completes a longer term head and shoulders top). Still, at least a setback looks likely near term as there are 5 waves up from the February low (and wave v is a diagonal). 8286-8350 is potential resistance from a gap. Expect weakness to at least below 7705. 7613 is potential support. It is possible that the rally from the February low completes wave C of an A-B-C flat. An impulsive decline from near current price would confirm as much.
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 at the DailyFX Forum. 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 tojsaettele@dailyfx.com.
Crude Traders Unable to Exploit Technical Break as Risk Ways the Market Down
March 4, 2010 at 7:47 pm by John Kicklighter · Leave a Comment
North American Commodity Update
Commodities – Energy
Crude Traders Unable to Exploit Technical Break as Risk Ways the Market Down
Crude Oil (LS NYMEX) – $80.39 // -$0.48 // -0.59%
Without momentum to step in to support yesterday’s push above $80.50, the active light sweet crude futures contract on the NYMEX would ultimately be led to a corrective move. Therefore, while the commodity technically marked its highest close since January 11th Wednesday, the market is still anchored to the congestion that has stalled progress for going on two weeks now. Undermining speculative efforts to carry crude to a new 16-month high are the dampening effects that stalled risk appetite has had across the capital markets. The same hesitation at the threshold of a new trend was seen in equities and EURUSD. The curb on sentiment is still a culmination of many different factors (including the struggles of an economic recovery, a withdrawal of government stimulus and uncertainty in sovereign debt risk); but risk aversion was leveraged today through a few notable events. The European Central Bank and Bank of England’s respective monetary policy decisions would offer little guidance on the difficult balance between growth and debt reduction. Both groups would maintain their benchmark rates and the BoE maintained its 200 pound bond purchasing program. However, the ECB would take another, measured move towards tightening with the announcement that it was switching to a variable rate on its three-month cash offers. Exacting a greater effect on sentiment, Greece finally decided to go forward with its necessary 5 billion euro bond sale after its spreads dropped following yesterday’s additional austerity cuts. With a bid of nearly three times what was offered, the market seemed confident in Greece’s ability to finance its debts. Nonetheless, calls for the EU to announce details on any aid package should the member economy need it from Finance Minister Papaconstantinou reflects the fine line this region is walking.
Going forward, it is very unlikely that oil will be able to decouple from its role as a speculative instrument. With global investors wary of adding to risky positions for fear of an unforeseen crisis, going long energy when global growth is still tame would be a risky step – especially at the market’s current highs. As for the ongoing adjustments to demand forecasts (through growth readings), the economic docket was light meaningful releases. Topping the list was the revision to the Euro Zone’s fourth quarter GDP figures. Whereas the headline figures for growth were unchanged at a 0.1 percent increase over the three-month period, household spending was notably upgraded to an unchanged figure. In other news, US factory orders rose by 1.7 percent in January and consumer spending – measured through the ICSC Chain Store Sales report – rose 2.7 percent. Tomorrow, the US non-farm payrolls could give the most meaningful adjustment to growth forecasts for the world’s largest economy that the market has seen in some time. Expectations are already set low with a forecast for 65,000 jobs lost and an uptick in the unemployment rate to 9.8 percent; but this speaks more to the slow recovery the economy has ahead of it rather than ushering in renewed fear of a secondary recession. From the supply side, the US Department of Energy inventory report for the week ending February 26th yesterday recorded a 4.03 million barrel increase – extending the longest series of weekly increases since May and which pushed total inventories to its highest level since August. Alternatively, refineries increase their utilization rates to 81.9 percent – the highest level since October.
Watch our weekly, live coverage of the DoE Inventory figures every Wednesday beginning at 10:15 AM EST.
Commodities – Metals
Tempered Risk Appetite Draws Gold’s Controlled Rally to a Close
Spot Gold - $1,131.80 // -$8.10 // -0.71%
Spot gold fell for the first time in six days, ending the longest stretch of gains since early October. However, this pullback would ultimately come at the same pace the initial upswing was running. Quantifying the lack of momentum behind the metal’s recent bull trend, the CBOE’s Gold Volatility Index fell to a seven-week low of 20.06 percent. Notably, this activity levels just above the January and October lows that preceded forceful bearish and bullish waves respectively. This trend towards moderation comes from the soothed sense of financial uncertainty that peaked with the perceived Greek crisis. However, this is not to mean that risk trends have vanished for good while inflation and growth concerns step back in. Greece’s ability to fund its deficit is still questionable and a revival in market-wide fear could expose doubts about this region. Yet, even if this hot spot for investor anxiety were to fade, there is still a matter of ballooned global deficits and warnings surrounding sovereign credit ratings for even the largest economies. This raises the value of the metal as a safe haven when investors are looking for an alternative to devalued fiat currency. In the meantime, Friday’s US employment report could resuscitate gold bug’s focus on risk trends as this data weighs on investors’ confidence about the global recovery and further exacts its influence on the US dollar.
Spot Silver - $17.12 // -$0.08 // -0.44%
Like its more expensive counterpart, silver would end the day in the red. However, the pullback the metal would put in for was notably more controlled than the series of daily advances that preceded it. Lacking the clear function as a store of value that gold so blatantly exploits, this commodity is more sensitive to the whims of risk appetite and the actions of the US dollar. This could lend itself to leveraged volatility following the release of the often-unpredictable US NFPs.
Discuss gold and oil trading with other traders in the DailyFX Forum
Written by John Kicklighter, Strategist
Questions or Comments about this article? Send them to jkicklighter@dailyfx.com
Euro / Dollar; Implementing a Stop and Reverse Strategy
March 3, 2010 at 11:52 am by Jamie Saettele · Leave a Comment
Euro / US Dollar
The EURUSD is either headed lower in a terminal thrust from a triangle or is headed higher following completion of a ending diagonal. Given the media’s focus on the euro decline, the latter seems more likely. From a strategic perspective, I like shorts below 13690 with a stop and reverse at that point. If the stop and reverse is triggered, then the initial objective is 13840. If not, then the downside objective is 13100.
British Pound / US Dollar
The GBPUSD has plunged in what is clearly a 3rd of a 3rd wave decline (3 of 3 of 3 from 15831). A series of 4th and 5th waves are expected to unfold over the next several weeks. Near term, expect resistance at 15100 – price should remain below 15350.
Australian Dollar / US Dollar
No change: “After reaching the area of the former 4th wave (common topping area) and slightly exceeded the 61.8% retracement of the previous decline, the AUDUSD rolled over and declined to 8800. That decline may be just an x wave in a larger correction that will exceed 9077.” Resistance would be at 9170.
New Zealand Dollar / US Dollar
No change: “The NZDUSD is in the same situation as the AUDUSD. The rally from 6804 may have completed the entire correction from 6804 but respect the potential for an extended and more complex advance. Staying below 7090 keeps me bearish for a break below 6800. Above there would expose 7156-7201.”
US Dollar / Japanese Yen
Continue to favor the downside, targeting 8690-8736 (8690 is the 100% extension of the decline from 9380). A decline to that level may complete an A-B-C decline from 9380. Price ideally remains below 8954. Exceeding that level would expose 8975-9038.
US Dollar / Canadian Dollar
The USDCAD has dropped below 10368 and to its lowest level since mid January. The potential for a bottom and reversal remains but confidence is low. It is also possible that a bearish triangle is complete from the October 2009 low at 10684. 10450 is resistance.
US Dollar / Swiss Franc
The USDCHF is in the same position as the EURUSD (but as the inverse). A triangle may be complete at 10692. If so, then the USDCHF is headed higher in a terminal thrust from the triangle. The other possibility is that an ending diagonal is complete from 10600. It is best to implement the stop and reverse strategy with 10690.
Gold
Gold has traded sideways since December and appears to be building a bullish base. Specifically, the base could be a complex head and shoulders (the head itself is a head and shoulders). In order to complete the pattern, gold would sell off once more towards 1075 before finding a right shoulder low.
Light Crude
Crude remains strong and the larger trend is considered up as long as price is above 6859 (under there completes a head and shoulders top). Still, at least a setback looks likely near term in a c wave that should end below 7705. Supports are 7613 and 7472.
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 at the DailyFX Forum. 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 tojsaettele@dailyfx.com.
Canadian Dollar Strong; but Still above January Low
March 2, 2010 at 3:13 pm by Jamie Saettele · Leave a Comment
Euro / US Dollar
The EURUSD continues sideways trend continues (although there was a spike below the 2/18 low last night). A break below 13440 or above 13700 is required in order to set a directional bias. A break lower would shift focus to the Fibonacci extension near 13100 and a break higher to parallel channel.
British Pound / US Dollar
The GBPUSD has plunged in what is clearly a 3rd of a 3rd wave decline (3 of 3 of 3 from 15831). A series of 4th and 5th waves are expected to unfold over the next several weeks. An objective is a Fibonacci extension at 14320. Price should remain below 15100.
Australian Dollar / US Dollar
No change: “After reaching the area of the former 4th wave (common topping area) and slightly exceeded the 61.8% retracement of the previous decline, the AUDUSD rolled over and declined to 8800. That decline may be just an x wave in a larger correction that will exceed 9077.”
New Zealand Dollar / US Dollar
No change: “The NZDUSD is in the same situation as the AUDUSD. The rally from 6804 may have completed the entire correction from 6804 but respect the potential for an extended and more complex advance. Staying below 7090 keeps me bearish. Above there would expose 7156-7201.”
US Dollar / Japanese Yen
I wrote last week that “the USDJPY rally (from 8481) is corrective, which leaves the pair vulnerable to weakness below that level. Still, a larger correction may be underway since the decline from 9380 is not impulsive either. The pair has rolled over and dropped through 9140 and 9056. The count above suggests additional weakness below 8854.” 8975-9040 is resistance and 8690-8736 would be potential support.
US Dollar / Canadian Dollar
The USDCAD has dropped below 10368 and to its lowest level since mid January. The potential for a bottom and reversal remains but confidence is low. It is also possible that a bearish triangle is complete from the October 2009 low at 10684. 10450 is resistance.
US Dollar / Swiss Franc
No change: “I remain bigger picture bullish the USDCHF but bulls should keep risk tight given the near term chop. Bottom line; stay bullish above 10645 (be aware that a rally above 10902 could complete a diagonal from 10607). 11026-11091 is a target area.” A drop below 10700 would delay the bullish bias.
Gold
Gold’s failure to extend losses dampens confidence in the downside. This bullish count, in which the metal would reach a new high, is valid against 108850.
Light Crude
Crude remains strong and the larger trend is considered up as long as price is above 6859 (under there completes a head and shoulders top). Still, at least a setback looks likely near term. Supports are 7613 and 7472.
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 at the DailyFX Forum. 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 tojsaettele@dailyfx.com.
British Pound Plunges; Reaches Fibonacci Confluence
March 1, 2010 at 12:24 pm by Jamie Saettele · Leave a Comment
Euro / US Dollar
The EURUSD has been unable to mount much of a rally since the low was made on February 18th. Staying below 13695 keeps the pair headed lower towards the Fibonacci extension near 13100. A rally above would expose 13800-40.
British Pound / US Dollar
The GBPUSD has plunged in what is clearly a 3rd of a 3rd wave decline (3 of 3 of 3 from 15831). Fibonacci extensions are just below today’s low. A series of small 4th and 5th waves should unfold, keeping the pair headed lower. 15000 is short term resistance.
Australian Dollar / US Dollar
After reaching the area of the former 4th wave (common topping area) and slightly exceeded the 61.8% retracement of the previous decline, the AUDUSD rolled over and declined to 8800. That decline may be just an x wave in a larger correction that will exceed 9077.
New Zealand Dollar / US Dollar
The NZDUSD is in the same situation as the AUDUSD. The rally from 6804 may have completed the entire correction from 6804 but respect the potential for an extended and more complex advance. Staying below 7090 keeps me bearish. Above there would expose 7156-7201.
US Dollar / Japanese Yen
I wrote last week that “the USDJPY rally (from 8481) is corrective, which leaves the pair vulnerable to weakness below that level. Still, a larger correction may be underway since the decline from 9380 is not impulsive either. The pair has rolled over and dropped through 9140 and 9056. The count above suggests additional weakness below 8854.” 8975-9040 is resistance.
US Dollar / Canadian Dollar
I am extremely bullish against 10368. The rally from there is in 5 waves, which indicates, with a high degree of confidence, that the larger trend has turned up. 10480-10520 is short term support. The minimum objective is above 10875.
US Dollar / Swiss Franc
No change: “I remain bigger picture bullish the USDCHF but bulls should keep risk tight given the near term chop. Bottom line; stay bullish above 10645 (be aware that a rally above 10902 could complete a diagonal from 10607). 11026-11091 is a target area.” A drop below 10700 would delay the bullish bias.
Gold
Gold has broken below a short term channel and price declining from the top of its long term channel warns of a more significant downside reversal. The short term structure is clearing up. The decline from 1132 is in 5 waves, which indicates that the larger trend has probably turned down.
Light Crude
An expanded flat is probably nearing completion in crude. I wrote last week that “if this is the pattern unfolding, then price would exceed 7804 before the larger trend turns back down.” I favor the downside against 8078. Coming under 7613 would probably be enough to suggest that the larger trend has turned down.
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 at the DailyFX Forum. 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 tojsaettele@dailyfx.com.
US Dollar / Canadian Dollar Rally Confirms that Low is in Place
February 24, 2010 at 11:50 am by Jamie Saettele · Leave a Comment
Euro / US Dollar
No change: “The rally from 13443 may be the beginning of a larger 4th wave. The next major resistance is 13842. This does not mean that it is time to turn bullish however. 4th waves are often choppy and tend to form as flats or triangles. Range trading may dominate for the next several weeks. Coming under 13443 could also complete a diagonal from 13842. It is also worth noting that as long as price is below 13793, the series of lower highs remains intact. The evidence is conflicting; there are better opportunities.”
British Pound / US Dollar
No change: “The decline from 15825 is wave of 3 within the 5 wave decline from 16464. Having yet to reach Elliott channel resistance, the rally from 15346 is probably the first portion of wave 4 (could unfold as a triangle or flat).”
Australian Dollar / US Dollar
The AUDUSD has reached the area of the former 4th wave (common topping area) and slightly exceeded the 61.8% retracement of the decline. I mentioned the potential for additional corrective action and that has taken place. Additional resistance is 9099 and 9170. Coming under 8803 would inspire confidence in the downside.
New Zealand Dollar / US Dollar
The NZDUSD is in the same situation as the AUDUSD. The rally from 6804 may have completed the entire correction from 6804 but respect the potential for an extended and more complex advance. Staying below 7090 keeps me bearish. Above there would expose 7156-7201.
US Dollar / Japanese Yen
The USDJPY rally (from 8481) is corrective, which leaves the pair vulnerable to weakness below that level. Still, a larger correction may be underway since the decline from 9380 is not impulsive either. The pair has rolled over and dropped through 9140 and 9056. The count above suggests additional weakness below 8854. 9056-9100 is short term resistance.
US Dollar / Canadian Dollar
I am extremely bullish against 10368. The rally from there is in 5 waves, which indicates, with a high degree of confidence, that the larger trend has turned up. 10480-10520 is short term support. The minimum objective is above 10875.
US Dollar / Swiss Franc
No change: “I remain bigger picture bullish the USDCHF but bulls should keep risk tight given the near term chop. Bottom line; stay bullish above 10645 (be aware that a rally above 10902 could complete a diagonal from 10607). 11026-11091 is a target area. A drop below 10645 would delay the bullish bias.”
Gold
Gold has broken below a short term channel and price declining from the top of its long term channel warns of a more significant downside reversal. The short term structure is clearing up. The decline from 1132 is in 5 waves, which indicates that the larger trend has turned down.
Light Crude
An expanded flat is probably nearing completion in crude. I wrote last week that “if this is the pattern unfolding, then price would exceed 7804 before the larger trend turns back down.” I favor the downside against 8078. Coming under 7613 would probably be enough to suggest that the larger trend has turned down.
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 at the DailyFX Forum. 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.
Canadian Dollar and Oil are Vulnerable
February 23, 2010 at 2:54 pm by Jamie Saettele · Leave a Comment
Euro / US Dollar
The rally from 13443 may be the beginning of a larger 4th wave. The next major resistance is 13842. This does not mean that it is time to turn bullish however. 4th waves are often choppy and tend to form as flats or triangles. Range trading may dominate for the next several weeks. Coming under 13443 could also complete a diagonal from 13842. It is also worth noting that as long as price is below 13793, the series of lower highs remains intact. The evidence is conflicting; there are better opportunities.
British Pound / US Dollar
The decline from 15825 is wave of 3 within the 5 wave decline from 16464. Having yet to reach Elliott channel resistance, the rally from 15346 is probably the first portion of wave 4 (could unfold as a triangle or flat).
Australian Dollar / US Dollar
The AUDUSD has reached the area of the former 4th wave (common topping area) and slightly exceeded the 61.8% retracement of the decline. I mentioned the potential for additional corrective action and that has taken place. Additional resistance is 9099 and 9170. Coming under 8874 would inspire confidence in the downside.
New Zealand Dollar / US Dollar
The NZDUSD is in the same situation as the AUDUSD. The rally from 6804 may have completed the entire correction from 6804 but respect the potential for an extended and more complex advance. Staying below 7090 keeps me bearish. Above there would expose 7156-7201.
US Dollar / Japanese Yen
The USDJPY rally (from 8481) is corrective, which leaves the pair vulnerable to weakness below that level. Still, a larger correction may be underway since the decline from 9380 is not impulsive either. The pair has rolled over and dropped through 9140 and 9056. The count above suggests additional weakness below 8854. 9100 is short term resistance.
US Dollar / Canadian Dollar
I maintain a longer term bullish bias against 10223. I expect the decline from 10784, which is wave c of an expanded flat, to give way to the next leg of the larger bull. 10319/52 is support is needed but price ideally stays above 10368. Trading above 10534 would confirm that the larger trend has turned up.
US Dollar / Swiss Franc
I remain bigger picture bullish the USDCHF but bulls should keep risk tight given the near term chop. Bottom line; stay bullish above 10645 (be aware that a rally above 10902 could complete a diagonal from 10607). 11026-11091 is a target area. A drop below 10645 would delay the bullish bias.
Gold
I am unsure of gold’s structure at the current juncture. The next level of resistance would be 1140/50. Gold has broken below a short term channel and price declining from the top of its long term channel warns of a more significant downside reversal. Coming under 1098 would be bearish.
Light Crude
An expanded flat is probably nearing completion in crude. I wrote last week that “if this is the pattern unfolding, then price would exceed 7804 before the larger trend turns back down.” Beware of a bearish reversal. Coming below 7810 would signal as much. The next level of potential resistance would be 8154.
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 at the DailyFX Forum. 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.
Sideways Correction May be Underway in EURUSD
February 22, 2010 at 12:15 pm by Jamie Saettele · Leave a Comment
Euro / US Dollar
I mentioned the possibility that the discount rate decline was a terminal thrust from a triangle and that suspicion has been proved correct as the entire decline from 13660 has been retraced. The rally from 13443 may be the beginning of a larger 4th wave. The next major resistance is 13842. This does not mean that it is time to turn bullish however. 4th waves are often choppy and tend to form as flats or triangles. Range trading may dominate for the next several weeks.
British Pound / US Dollar
The decline from 15825 is wave of 3 within the 5 wave decline from 16464. Given the EURUSD count, it makes sense that a 4th wave correction is underway in the GBPUSD also. Former supports from 15555 to 15640 should now serve as resistance.
Australian Dollar / US Dollar
The AUDUSD has reached the area of the former 4th wave (common topping area) and the 61.8% retracement of the decline. The rally is in 3 waves and is therefore corrective but the move may be just the first leg of a larger more complex pattern. I am bearish against 9044 because even in the event of a more complex correction, a b or x wave could lead to weakness below 8874.
New Zealand Dollar / US Dollar
The NZDUSD is in the same situation as the AUDUSD. The rally from 6804 may have completed the entire correction from 6804 but respect the potential for an extended and more complex advance. Staying below 7090 keeps me bearish. Above there would expose 7156-7201.
US Dollar / Japanese Yen
The USDJPY rally (from 8481) is corrective, which leaves the pair vulnerable to weakness below that level. Still, a larger correction may be underway since the decline from 9380 is not impulsive either. The pair has rolled over from just above 9200. 9060 is support. From a pattern perspective, clarity is lacking.
US Dollar / Canadian Dollar
I maintain a longer term bullish bias against 10223. I expect the decline from 10784, which is wave c of an expanded flat, to give way to the next leg of the larger bull. 10319/52 is support is needed. Trading above 10534 would confirm that the larger trend has turned up.
US Dollar / Swiss Franc
I remain bigger picture bullish the USDCHF but bulls should keep risk tight given the near term chop. Bottom line; stay bullish above 10645. 11026-11091 is a target area. A drop below 10645 would delay the bullish bias.
Gold
I am unsure of gold’s structure at the current juncture. The next level of resistance would be 1140/50. Gold has broken below a short term channel and price declining from the top of its long term channel warns of a more significant downside reversal. Coming under 1098 would be bearish.
Light Crude
An expanded flat is probably nearing completion in crude. I wrote last week that “if this is the pattern unfolding, then price would exceed 7804 before the larger trend turns back down.” Beware of a bearish reversal. Coming below 7810 would signal as much. The next level of potential resistance is 8154.
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 at the DailyFX Forum. 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.
US Dollar Consolidates Gains; EURUSD 13660 Defines Trend
February 19, 2010 at 11:19 am by Jamie Saettele · Leave a Comment
Euro / US Dollar
Perspective is of utmost importance when dealing with speculative activities and this EURUSD daily chart offers just that. Yesterday’s break may have been a terminal thrust from a triangle but the break also distanced price from the 100% extension level (13650), which increases . With price pressing the bottom of its channel, focus remains on the 161.8% extension at 13073 (which is why the target is 13100). Staying below 13658 keeps the trend pointed lower. 13423 may provide support.
British Pound / US Dollar
The GBPUSD has broken lower but the decline from 15825 may be wave 5 of the 5 wave decline from 16464. Price has reached the mid 15300’s…an important level in that 15356 was a breakout level from 2009. However, do not neglect an extended 3rd of a 3rd count from 15825; especially since price has broken below unorthodox channel support. These breaks often signal the beginning of an extended move. 15500 is resistance.
Australian Dollar / US Dollar
I wrote yesterday that the AUDUSD “has reached the area of the former 4th wave (common topping area) and the 61.8% retracement of the decline. Resistance extends to 9133 and I expect a top to form.” I am bearish against 9044 and expect the decline to accelerate. Initial support is 8780.
New Zealand Dollar / US Dollar
I wrote yesterday that “a break of the short term channel should be enough to proclaim the return of the decline.” The NZDUSD broke the aforementioned channel and risk can therefore be moved to 7088. A move above would expose 7123/56. 6900 is potential short term support.
US Dollar / Japanese Yen
The USDJPY rally (from 8481) is corrective, which leaves the pair vulnerable to weakness below that level. Still, a larger correction may be underway since the decline from 9380 is not impulsive either. The rally has blown through the top of its short term channel and reached resistance from 9200. 9140 is short term support. From a pattern perspective, clarity is lacking.
US Dollar / Canadian Dollar
From yesterday, “I maintain a longer term bullish bias against 10223. 10415, which is former resistance and the 61.8% retracement, has held. Long term traders can establish longs against the January low but short term traders should await clarification of the near term picture. Near term, the rally that ended just shy of 10500 may be wave iv of c. A drop below 10408 would complete wave c. Support should be strong just below 10400 (watch the mid channel line).” The USDCAD slipped below 10400 to reach 10395 and turned up to trade through the c wave channel. Favor the upside against 10395. 10583 is potential resistance.
US Dollar / Swiss Franc
I remain bigger picture bullish the USDCHF but bulls should keep risk tight given the near term chop. Bottom line; stay bullish above 10645. 11026-11091 is a target area.
Gold
I am unsure of gold’s structure at the current juncture. The next level of resistance would be 1140/50. Gold has broken below a short term channel and price declining from the top of its long term channel warns of a more significant downside reversal. Coming under 1098 would be bearish.
Light Crude
An expanded flat is probably nearing completion in crude. I wrote yesterday that “if this is the pattern that is unfolding, then price would exceed 7804 before the larger trend turns back down. A drop below 7569 would re-inspire confidence in the downside.” Beware of a bearish reversal. Coming below 7810 would signal as much. The next level of potential resistance is 8154.
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 at the DailyFX Forum. 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.
