Forex Technicals: The Day Ahead, October 1

[DailyFx]

While multiple counts are still valid in the EURUSD, the GBPUSD count has cleared up. There are good opportunties in this pair to start October.









There remain a number of possibilities. While not clearly an impulse, the decline from near 1.49 is deep and accelerating. Remaining below 1.4576 keeps the most bearish count on track (in which a small 3rd wave is down from there). The larger correction scenario is still possible (triangle or flat). Until a break of 1.3877, we can not eliminate bullish potential. 1.4170 may be resistance.




The USDJPY is still in a range. I favor the downside as long as price is below the trendline from the 110.71 top. However, failure to continue lower through 103.50 does not instill confidence in the bearish bias.




Cable appears to have cleared up. 5 waves down from 1.8675 are visible. This suggests that the larger downtrend is still underway. Expect a countertrend rally, into at least 1.81 (38.2% and congestion) before the downtrend resumes.




The USDCHF surged higher today. The pattern is the same as the EURUSD but flipped over. That is, the decline from 1.1422 is corrective, which is bullish. If a larger advance is underway, then price should remain above 1.0812. The risk to bulls is that a larger correction is underway from 1.1422 and that the advance from near 1.07 is an X wave. There is potential support near 1.11.




This is a possible count. Waves 4 and 5 are small relative to waves 1 through 3, but this is the best count I see right now. If the decline from 1.0827 is an impulse, then the USDCAD should roll over from near current price (61.8% to 78.6% Fibonacci levels).




The decline from .8524 is either a B wave within a larger correction from .7799 or the beginning of the next bear leg in a long term downtrend. A break of .7799 would eliminate any bullish count.




The advance from .6435 is in 3 waves so a the long term decline may be back underway. It is also possible that a larger correction is underway that will end closer to .72. Action over the next several days should help to clear things up.







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