- Euro Triangle or Flat
- Japanese Yen Rallies More Convincing (USDJPY Declines)
- British Pound Decline is Choppy
- Swiss Franc Trendline is Key
- Canadian Dollar Pierces 1.1200
- Australian Dollar Trendline Break
- New Zealand Dollar Just Above Its Trendline
EURUSD - The reversal that we have been looking for may be underway (see http://www.dailyfx.com/story/charting_center/weekly_chart_analysis/Wave_Counts__Divergent_Oscillators__Pivot_1177085359949.html for more). It looks like there are 5 waves down from 1.3637 to 1.3541 and this consolidation will play out as either a triangle or flat in the 2nd wave or b wave position. Potential trendline support is near 1.3470 and resistance is at the 61.8% of 1.3637-1.3541 at 1.3600. 1.3637 is critical to the bearish case.
USDJPY - The inability of the USDJPY to break above the 119.00 figure suggests that we examine a bearish alternate. For one, the entire rally from 115.14 is corrective. The latest rally from 117.60 looks corrective when compared to the decline from 119.84. So far, the USDJPY has held below the 61.8% of 119.84-117.60 at 118.98, which is also often seen with corrections. Coming under 118.22 would clear up the near term pattern, suggesting that another leg down is underway. 119.84 is the line in the sand for the bears.
GBPUSD - The doji made on 4/18 along with divergent RSI on the daily gives scope to a reversal. Still, the decline from the top is corrective, which leaves GBPUSD open to another high. The deeper correction that we mentioned may be taking place may be complete at 1.9955 as there are 3 waves down from the top. A break above 2.0068 opens up the door to more bullish prospects. Additional support is at the 38.2% of 1.9589-2.0131 at 1.9924.
USDCHF - Near term, the rally from 1.2000 to 1.2126 looks impulsive and the decline from 1.2126 is coming in on the 61.8% of 1.2000-1.2126 at 1.2048. Confidence in the upside would improve if 1.2048 can hold (although 1.2000 is the key level). Divergent oscillators at the recent low on the daily favor bulls. Caution is warranted though as yesterdays high was rejected at a trendline from the 4/9 and 4/11 highs. Pushing through this line indicates more bullish potential.
USDCAD - The USDCAD has pierced the 1.1200 figure this morning and this may be what needs to happen before the USDCAD can stage a much needed rally (major divergence with RSI on the 240 minute chart). There is little doubt that the decline from 1.1825 is a 3rd wave. Therefore, any rally should be treated like a correction as a 5th wave decline will eventually take the USDCAD to lower levels. Initial resistance is the 4/19 high at 1.1309. The next support level is the 10/30/2006 low at 1.1176.
AUDUSD - With the declines looking impulsive and the rallies looking corrective (3 waves), the path of least resistance in the AUDUSD is now down. Price should come under .8233 fairly soon in order to complete a small degree 3rd wave before a 4th wave bounce. The break below trendline support last night bolsters the bearish bias. A measured objective is at the 161.8% extension of .8390-.8280 / .8376 at .8198 (potential support).
NZDUSD - Kiwi has yet to break below its trendline support, which is just below the days lows near .7380. Also, with just 3 waves down so far from .7482, the possibility remains that the NZDUSD could push to a new high. Former support at .7428 is now resistance and as long as price is below there, the bearish structure is intact. Daily oscillators favor the reversal scenario as RSI has declined from above 70.
