Forex Technicals: The Day Ahead, September 9

[DailyFx]

The clearest short term pattern belongs to the AUDUSD. Nearly all pairs appear to be setting up for at least short term reversals though.









There is no indication that a low is in place but there are a few things that do warn of a turn. RSI divergence on multiple time frames and oversold RSI on multiple time frames suggest weakness is limited. One can label the drop from above 1.49 as 5 waves. A rally through 1.4428 would indicate that a larger advance is underway.




Violent intraday swings have led to little movement on balance for the USDJPY this month (the pair opened the month at 108.39). We have favored the downside but the lack of follow through and impressive rebound from below 106 are signs that the path may not be lower after all. A break above 109 would confirm an inverse head and shoulders reversal as well.




Cable is in the same position as the EURUSD. A rally through 1.7974 would signal that a larger correction is probably underway (back to 1.85/88). Until then, the pair is vulnerable to weakness, although oscillators on multiple time frames and sentiment measures suggest that weakness should prove limited.




The USDCHF is nearing a Fibonacci confluence (1.1453-1.1590). The December 2007 high at 1.1594 defends this area as well. Ideally, resistance is strong at and possibly ahead of these levels.




The advance from .9055 may be nearing an end. For one, both legs of the advance are 3 wave structures and separated by a triangle. What we are left with is a complex corrective advance. As long as price is below 1.0927, there is the chance for a major top to form.




5 waves up from .8027 warrants a bullish stance as long as price is above there. IF this is the beginning of the larger corrective advance, then price should exceed .8352 soon.




The structure of the decline from .7215 indicates that risk is to the upside. A rally above .6841 would signal that a larger correction is underway.





Jamie Saettele writes Forex Technicals: The Day Ahead, Monday-Thursday (published 6-7 pm EST), Daily Technicals every weekday morning (9-10 am EST), COT analysis (published Monday mornings), and analysis of currency crosses throughout the week. He is also the author of Sentiment in the Forex Market.



Contact him at jsaettele@dailyfx.com