USD

Corporate Earnings Drive US Equities Higher

U.S. Session Key Developments

•    Corporate Earnings Continue To Beat Expectations
•    Commodities Higher As Dollar Pullbacks
•    Obama Proposes Plan To Help Small Businesses

US Stocks posted significant advances for the second straight day as Corporate America is on track to report one of the best quarterly earnings seasons on record in terms of how many companies beat expectations with their profits.  Today alone, nineteen of the twenty-two S&P 500 companies that reported had better than expected profits.  D.R. Horton Inc., the second-biggest U.S. homebuilder by revenue, posted a 318 percent earnings surprise, the biggest one today.  With data showing that monthly pending home sales increased one percent in December, signs point to a recovering housing sector.  In addition to stocks, commodities also gained for the second straight day with the CRB commodity index up almost three percent over the last two sessions.  March crude contracts traded to 77.02, up 3.5 percent today and up about 7 percent this week.  Gold was also higher to 1,114, up almost one percent in the session.  The move in commodities was facilitated by a weak dollar, which was lower against 9 out of the 10 G10 currencies.  The Australian Dollar was the major exception after the Reserve Bank of Australia defied forecasts by maintaining its cash rate at 3.75 percent.  As investors await this Friday’s Non-Farm Payrolls figure, President Obama intensified his focus on job creation by announcing a plan to redirect $30 billion in repaid TARP bailout loans to small community banks in hopes of making it easier for them to lend to small businesses.  Republicans criticize the plan as they had tapped those funds to bring down the budget deficit.

DJIA 30                      10,296.85                   +111.32                       +1.09%
The Dow Jones Industrial Average was up over 1 percent for the second straight day.  General Electric Co. was the top performing component of the index after the company’s backup engine for the F-35 Joint Strike Fighter won support from the Armed Services committee chairman after Defense Secretary Robert Gates excluded it from the Pentagon’s 2011 budget proposal.  The company’s shares were up 3.69 percent to 16.85.

S&P 500                      1,103.32                       +14.13                         +1.30%
The broad-base S&P 500 was the best performer of the three major indices, closing back above the psychologically-significant 1100.  All 10 of the index sectors were in the green with all but 3 posting gains over 1 percent.  Health Care was the top performing sector, up 1.92 percent, even as President Obama urged Congress to push his health-care initiative through the House of Representatives.  Lawmakers warned that further delay could jeopardize passage.

NASDAQ                     2190.06                      +18.86                         +0.87%
The Nasdaq Composite Index was higher today after technology stocks, which hold by far the most weight, gained 0.79 percent on the day.  Adobe Systems Inc. gained 1.54 percent after its chief technical officer criticized Apple for not supporting Adobe Flash on its iPhone and iPad devices.  Apple, which is the only smartphone provider that does not support Flash, saw its shares gain 0.58 percent in today’s session.

Written by Gary Chalik, CFDTrading Research
Please send any comments about this report to GChalik@fxcm.com

USD

10590 Serves as USDCAD Pivot

Euro / US Dollar

Bigger picture, “staying below 14583 keeps the larger trend pointed lower in either a 3^rd wave or C wave.  If a C wave, then the decline should extend to the 13650-13750 area.  If a 3^rd wave, then the decline likely extends closer to 13000.”  Near term, favor the downside against 14200, as there are 5 waves lower from that level.  There is potential resistance at 14110/25.  Above 14200 would shift focus to 14250-14335.

British Pound / US Dollar

Price has stayed below 16289, which keeps me bearish near term.  Bigger picture, I want to be positioned short for the expected break of 15700 and subsequent breakdown, which should be violent.  The breakdown would come from a 10 month distribution pattern known as a diamond top; a rare pattern.

Australian Dollar / US Dollar

The AUDUSD decline from 9334 is in 5 waves.  A corrective advance is expected and the resistance zone is 9100-9170.  Look to short at these levels.

New Zealand Dollar / US Dollar

The NZDUSD is nearing the December low of 6972.  A break would shift focus to 6600.  Near term, there may be 5 waves down from 7446.  A return to 7175-7240 would serve to correct the decline from there.  This would enable short positions against 7446 for a break lower.

US Dollar / Japanese Yen

The rally from 8481 is a 3 wave correction rather than the first 3 waves of an impulse.  The decline from 9380 is unfolding in a corrective manner as well.  Favor additional weakness with price below 9060.  8840/8890 is potential support.

US Dollar / Canadian Dollar

The USDCAD is approaching its December high of 10754.  A break above there would expose 10875 and above there would confirm that a 3^rd wave (or C wave) is underway towards much higher levels.  Near term, a drop below 10590 would signal that a corrective decline is underway, possibly to 10440.  Above there keeps the immediate pointed higher.

US Dollar / Swiss Franc

Like the EURUSD, it is unclear if a 3^rd wave is underway (from 10366) or if the rally from 10128 is the first wave of the next impulse.  Staying above 10366 keeps the immediate trend pointed higher but the larger trend is bullish against 10128.  A soft bullish target going forward is 11026/91.  This is the former 4^th wave extreme / 161.8% extension of the 9916-10511 advance.

Gold

The recent top in gold occurred just above long term channel resistance and was accompanied by RSI divergence.  An important top may be in place and the risk of the sell-off intensifying is high below 1163.

Light Crude

Crude’s rally from 6426 may be complete as an ending diagonal.  Diagonals are often fully retraced…and in a sharp manner.  Coming under 7245 would confirm that a top is in place and shift focus to 6426.  7650 is short term resistance.

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.

USD

Dollar Mixed; Euro Rally is Corrective

Euro / US Dollar

Near term, a small 4^th wave correction may be complete.  Additional resistance would be at 14250.  Staying below 14334 keeps the trend pointed lower.  Keep in mind the alternate labeling, which is decidedly more bearish.  Under the alt., the near term advance would be a smaller 2^nd wave and the next drop would be a third of a third, which would probably reach the mid 13000s quickly next week.  An extended fifth wave is also possible.  My point is to refrain from taking profit on a drop to a new low.

British Pound / US Dollar

I wrote yesterday that “there are 5 waves down from 16464 and the rally from this morning’s low should prove corrective.  Resistance should be strong at 16310 (former support).”  The rally did prove corrective and ended this morning.  Risk can be moved to this morning’s high.  A short term target is 15950 although the ultimate objective is below 15700.

Australian Dollar / US Dollar

The dominate pattern remains the decline from just above 9400, which counts well as an a-b-c decline with wave b as a triangle.  This pattern suggests that the larger trend is still up, which is at odds with other USD bullish counts.  One possibility is that the 3 wave decline is wave A of triangle or flat with the succeeding rally as wave B.  This would keep the near term trend pointed lower.

New Zealand Dollar / US Dollar

I wrote yesterday that “I am treating the decline as corrective unless the drop extends into 5 waves (these are the labels that are shown).”  The NZDUSD extended into 5, therefore I am bearish on pullbacks.  There is resistance at 7240.

US Dollar / Japanese Yen

The rally from 8481 is a 3 wave correction rather than the first 3 waves of an impulse.  The decline from 9380 is unfolding in a corrective manner as well.  Favor additional weakness with price below 9189.  The next potential support is 8892.

US Dollar / Canadian Dollar

The USDCAD may be nearing a short term top.  The rally is in 5 waves and the last leg up may be a thrust from a triangle.  Triangles occur in 4^th waves, therefore the rally from the triangle is a 5^th wave.  A setback next week would present a bullish opportunity.

US Dollar / Swiss Franc

The USDCHF has extended its rally from the 61.8% retracement and conditions remain bullish.  10511 is expected to give way to a 3^rd wave, and a soft target is 11026/91.  This is the former 4^th wave extreme / 161.8% extension of wave 1.

Gold

Expect gold’s decline to extend below 1075.  I favor the expanded flat interpretation and staying below 1142 keeps the trend pointed lower.  The decline should accelerate if the above count is correct.

Light Crude

Crude’s rally from 7083 may be complete as an impulse.  Price needs to stay below 7950 in order to keep the bearish count on track.  Notice that the rally from 5832 looks like a diagonal.  Diagonals are often fully retraced…sharply.

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.

USD

Dollar Plunges to Start Week

Euro / US Dollar

The bearish count is no longer valid since the EURUSD has exceeded 1.4935.  What’s more, the rally from 1.4800 is impulsive (5 waves), which suggests that the larger trend does remain up.  1.4950, 1.4920, and 1.4880 are potential short term supports.

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).  Structurally, movements since 1.7050 appear corrective (3 waves), which would suggest a triangle, flat, or leading diagonal (all patterns favor lower prices from here).  1.6680 and 1.6750 are resistance levels.

Australian Dollar / US Dollar

Having exceeded and reversed from above .9334, the minimum expectations for wave .v of v of C has been met…respect the potential for a double top (which would be confirmed on a drop below .8900), especially when considering divergent momentum readings and patterns of other USD crosses.  More importantly, there are 5 waves down from .9410, confirming that a top is in place, which favors selling rallies.  The 61.8% of the decline from .9410 is being tested.  Price ideally turns over now.

New Zealand Dollar / US Dollar

Since the top at .7640, NZDUSD declines are impulsive (5 waves) and rallies are corrective (3 waves).  The larger trend has turned down and the objective is below .7080 (and probably much lower).  .7405 is potential resistance and price needs to stay below .7530 in order to keep the bearish count on track.

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 2^nd wave may be complete as a double zigzag from 92.35.  The more time that this correction consumes, the less confidence I have in the count.  Bulls need to see an impulsive rally from current levels.

US Dollar / Canadian Dollar

A double zigzag decline from 1.3068 is considered complete and the pair has carved out a solid 1-2 base (5 up and 3 down) since the October low.  A wave ii low is in place at 1.0415, which places the pair in wave iii higher targeting a break of 1.0875 followed by Fibonacci extensions of 1.1090 and 1.1500.

US Dollar / Swiss Franc

The USDCHF is in the exact same position as the EURUSD (just as the inverse).  The bullish count is no longer valid as price has come under 1.0120.  The triangle count is now favored.  1.0120 is now resistance.

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.

USD

Dollar Consolidates-1.4650 is Short Term EURUSD Support

Euro / US Dollar

As mentioned yesterday, “staying above 1.4480 keeps the uptrend intact and 1.4650 is potential short term support.  The EURUSD could of course make a new high (above 1.4850), but it would be in a blow-off top.  If the pair does spring to a new high (above 1.4850), then resistance is anywhere from the psychological 1.5000 to the line that is extended from the March and June highs (at 1.5372 next week).  1.5282 is the ‘breakdown’ level from 2008 and also potential resistance.”

British Pound / US Dollar

This is a chart that I showed two days ago in a DailyFX alert.  Commentary was that “the line extended from the September 11, 15, and 23 highs defines the short term trend.  This line is at 1.6105 today (just pips from the high).  Continue to favor the downside against there as price action since the 9/28 low is viewed as a consolidation that will give way to additional weakness.”  That line has held so there is no reason to move away from the bearish view.  1.5970 and 1.6000 are short term resistance levels.

Australian Dollar / US Dollar

The AUDUSD reached the midline of its channel today and is trading at its highest level since August 2008.  Continued divergence with momentum suggests that the decline is in its latter stages.  So far, .9100 has held but levels to watch going forward are .9200, .9270, and .9325 (these are former support levels from 2008).

New Zealand Dollar / US Dollar

The NZDUSD has reached what was former support from the June 2008 low at .7444.  Clearly, the advance is overdone as evidenced by RSI (which is divergent and declined from above overbought).  The rally is in its Fibonacci 8th consecutive month.  Still, like the AUDUSD, there is no way to measure risk for a short position until a pivot is established.  That pivot will probably be established after today’s close since yesterday’s high has not been exceeded but the low has been broken.

US Dollar / Japanese Yen

I wrote yesterday that the “recent dip below 30 in RSI warns of a shaper short covering rally (or more).  Exceeding 90.43 would confirm a short term double bottom.”  The USDJPY has broken above a steep short term resistance line and the next level of interest is the top of a 2 month channel / 90.43.  Again, trading through there would give scope to additional gains.

US Dollar / Canadian Dollar

Focus remains on 1.0317, which is the 61.8% extension of 1.3068-1.0782/1.1730.  1.0525/45 is a short term resistance zone.  Rallying through 1.0670 would begin to suggest an important bottoming out pattern.

US Dollar / Swiss Franc

The USDCHF daily wave count warns (and has been warning) of a significant low.  A rally above 1.0457/channel resistance would confirm a low.  Until then, the USDCHF is vulnerable however.  1.0370 is potential resistance.  Dropping to a new low (under 1.0180) exposes a measured level at 1.0037.

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.

USD

US Dollar Bullish Levels Clearly Defined

Euro / US Dollar

As long as the EURUSD is below 1.4680, my working assumption is that an important top is in place above 1.4800 (either a B wave or 2nd wave high within the bear that began at 1.6000 in 2008).  I have received numerous emails pointing out that the decline from the top is not an impulse and therefore the larger uptrend is intact.  There is a plethora of big picture bearish evidence, including daily wave count (far more important than hourly wave count), COT and other sentiment indicators, etc.  Also, the decline from 1.4550 could be a leading diagonal as wave i and the rally to 1.4680 wave ii.  My point is that the big picture evidence points to a big decline and it would foolish to ignore that evidence.  That is not to say that it is not possible that the rally continues.  There are no certainties.  Again, 1.4680 is the pivot.  Short term resistance levels are 1.4575 and 1.4615 (watch the trendline as well).

British Pound / US Dollar

Former support held as resistance (1.6111) and a short term channel defines the trend for now.  A near term target is 1.5290 (161.8% extension of 1.7050-1.6111).  The trend is down below 1.6130.  1.5923 is potential resistance.

Australian Dollar / US Dollar

Following the break to a new 2009 high, the AUDUSD has declined in a clear 5 waves.  .8666-.8720 is the resistance zone and bears are favored against the high (.8866).  If that level fails to hold, then focus would shift to .8950 and .9030.  .8950 is a former support level and .9030 is the 78.6% retracement of the decline from the 2008 high.

New Zealand Dollar / US Dollar

NZDUSD price action since its 2009 high has been choppy.  The topline of a channel since July and the midline of a channel since March rejected the NZDUSD advance but the NZDUSD has yet to come off much.  I wrote yesterday that “coming under .7100 would probably induce selling pressure and send the pair to .6900.  Until then, the waters are murky.”  The drop below .7100 materialized and the trend is bearish below .7260 towards .6900.  .7153 and .7175 are short term resistance levels.

US Dollar /Japanese Yen

Former support held as resistance earlier this week, which kept us bearish.  Additional comments this week were “while the trend is bearish below 91.65, the strength of the rally from channel support warrants consideration that a more important low is in place.  Trading above the short term resistance line extended from the 9/21 and 9/24 highs would be a sign that something more constructive is taking place.  For this reason, move risk on shorts to 90.50.”  This strategy has served us well as price has not exceeded 90.50 or the short term resistance line.  We’ll remain bearish below there, targeting a drop below 87.10.

US Dollar / Canadian Dollar

Maintain a bullish bias above 1.0650.  The rally from 1.0588 could be a series of 1st and 2nd waves.  This count is extremely bullish and gives scope to an extended rally.  With the USDCAD back above the former channel, confidence in the upside is increased.  Clearing 1.1130 would expose 1.1417 (former support).

US Dollar / Swiss Franc

The USDCHF daily wave count warns (and has been warning) of a significant low.  The USDCHF has broken through the top of a short term channel and is just below the top of a longer term channel line. Favor the upside

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.

USD

European Equity Technical Outlook

WEEKLY STRATEGY

FTSE 100 Pivot Table

DAX 30 Pivot Table

CAC 40 Pivot Table

FTSE 100

Long-term Technical Outlook

The FTSE has reached the 100% extension of the 3461-4521 rally (5156).  Parallel channel resistance at this level reinforces this level and increases the risk of a top and reversal.  5339 would be the next level of potential resistance.

Short-Term Technical Outlook

The FTSE may be on pace to put in a Double Top at 5189.88 as the RSI oscillator shows sharp negative divergence. A reversal lower would see initial support at 5082.28, the lower boundary of a rising channel established from mid-August.  Alternatively, a break higher would face the channel top at 5305.42.

DAX

Long-term Technical Outlook

The DAX has yet to reach its measured resistance point of 6113, which is where the 2 bull legs from the March low would be equal.  Potential resistance prior to that point is 5870 (50% of decline from 8152).  The mentioned 6113 is reinforced by 6168 (former support line in gray).

Short-Term Technical Outlook

Judging by strong negative divergence on the RSI oscillator, German benchmark index looks to be on pace to set a major Triple Top at 57490. Initial support is seen at 56788, the 14.6% Fibonacci retracement level.

CAC 40

Long-term Technical Outlook

Similar to the DAX, the CAC 40 has yet to reach its measured resistance point of 6113, which is where the 2 bull legs from the March low would be equal.  However, price is close and potential parallel channel resistance reiforces the current area as one that may provide the supply required to produce a reversal.

Short-Term Technical Outlook

As with the DAX30, divergence with momentum studies on the CAC is hinting that a downward reversal is ahead as prices test 3847.86 once again. Initial support is seen at 3753.11, a rising trend line established from the swing low in mid-August.

IBEX 35

Long-term Technical Outlook

The IBEX has reached the January 2008 low.  Former support is now resistance.  RSI divergence warns of a trend change as well.  Watch the trendline and top channel line as potential end points for the rally in the event that the advance continues.  1247 (100% extension) is also a level to expect a reversal if reached.

Short-Term Technical Outlook

A Rising Wedge with negative RSI divergence points to a bearish reversal ahead for Spanish issues. Initial support is seen at 1161.47, the wedge formation bottom.

S&P/MIB

Long-term Technical Outlook

The FTSE/MIB index encounters resistance from channel midline.  Additional levels to watch are 24916 to 26464.  The 100% extension of the 12332-20702 rally is near the top of this range.

Short-Term Technical Outlook

The FTSE/MIB looks essentially the same as most other European benchmark indexes, with negative RSI divergence suggesting prices are on pace to forming a near-term top. A reversal sees initial support at 22828.86 at a rising trend line established from mid-August.

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

USD

Dollar Finds Demand on Dips

Euro / US Dollar

I wrote yesterday that “the EURUSD is testing short term channel support.  A daily close below the line would increase confidence in the bearish bias and expose 1.4450.  Price should stay below 1.4650 at this point.”  The line held and the EURUSD spiked through 1.4650 and tested 1.4680 resistance.  With channel support holding, the midline/former congestion zone in the 1.4720/40 zone is now resistance.  Coming under the channel would set sights back on 1.4450.

British Pound / US Dollar

Former support held as resistance (1.6111).  I wrote yesterday to “watch for resistance at the top of a potential channel as well (drawn a line across recent lows and extend a parallel from the 9/23 high in order to construct this line).”  That line held and the GBPUSD remains on a path lower.

Australian Dollar / US Dollar

The AUDUSD broke to a new high and levels to keep in mind that could produce reversals are .8950 and .9030.  .8950 is a former support level and .9030 is the 78.6% retracement of the decline from the 2008 high.

New Zealand Dollar / US Dollar

NZDUSD price action since its 2009 high has been choppy.  The topline of a channel since July and the midline of a channel since March rejected the NZDUSD advance but the NZDUSD has yet to come off much.  Coming under .7100 would probably induce selling pressure and send the pair to .6900.  Until then, the waters are murky.

US Dollar / Japanese Yen

Former support has held as resistance in the USDJPY thus far.  “While the trend is bearish below 91.65, the strength of the rally from channel support warrants consideration that a more important low is in place.  Trading above the short term resistance line extended from the 9/21 and 9/24 highs would be a sign that something more constructive is taking place.”  For this reason, move risk on shorts to 90.50.

US Dollar / Canadian Dollar

Maintain a bullish bias above 1.0650.  The rally from 1.0588 could be a series of 1st and 2nd waves.  This count is extremely bullish and gives scope to an extended rally from current price.

US Dollar / Swiss Franc

The USDCHF daily wave count warns (and has been warning) of a significant low.  I wrote yesterday that “trading through the top of short term channel resistance would be a sign that a low is in place.”  The USDCHF has broken through the line, so favor the upside.

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.

USD

Euro Decline to Accelerate

Euro / US Dollar

The EURUSD is testing short term channel support.  A daily close below the line would increase confidence in the bearish bias and expose 1.4450.  Price should stay below 1.4650 at this point.

British Pound / US Dollar

Former support is now potential resistance in the 1.6110/65 zone (1.6050 is also potential resistance).  Watch for resistance at the top of a potential channel as well (drawn a line across recent lows and extend a parallel from the 9/23 high in order to construct this line).

Australian Dollar / US Dollar

The AUDUSD has been treading water since trading at .8797 on 9/23.  After breaking a short term channel, price has traded back towards the top of the range and the underside of the former support line.  Trading to a new high would expose .9032 (78.6% retracement).  It is worth noting that the rally from .6245 is exactly double the size (in price) as the .6005-.7275 advance (see yesterday’s daily chart).  A and C waves sometimes relate to each other by factors of .618, 1, 1.618 or 2.

New Zealand Dollar / US Dollar

The NZDUSD is similar to the AUDUSD in that price action since its 2009 high as been choppy.  The topline of a channel since July and the midline of a channel since March rejected the NZDUSD advance.  Last night’s high is now the risk level for bears and an initial target is .6900.

US Dollar / Japanese Yen

The USDJPY has reached former support, which is 90.10/34.  While the trend is bearish below 91.65, the strength of the rally from channel support warrants consideration that a more important low is in place.  Trading above the short term resistance line extended from the 9/21 and 9/24 highs would be a sign that something more constructive is taking place.

US Dollar / Canadian Dollar

Maintain a bullish bias above 1.0650.  The rally from 1.0588 could be a series of 1st and 2nd waves.  This count is extremely bullish and gives scope to an extended rally from current price.

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 short term channel resistance would be a sign that a low is in place.

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.

USD

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.

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