Big AUDUSD Tail Keeps Bulls In Control

• Euro Congestion Persists
• Japanese Yen Holds Its Losses After Move Through 118.50
• British Pound Triple Top Playing Out
• Swiss Franc Contemplates Fib Resistance
• Canadian Dollar Buttressed By Channel (USDCAD Support)
• Australian Dollar Reversal Bar Puts Off A Turn
• New Zealand Dollar Left Eyes .7300 As Bulls Return


EURUSD [/B]– The EURUSD continues to churn through the 1.3400-1.3250 range as the pair shows little directional bias. However, volatility on the 240 minute charts is beginning to compress. The pair has carved out a symmetrical triangle which tends to resolve in a breakout that often dictates direction for the near term . For now, the price action remains decidedly neutral and favors continued range trading.

USDJPY – USDJPY has risen into the 50%-61.8% Fibonacci “box” from the 1/29-3/05/07 bear wave. If the price actions peters out at that level on the daily charts it would suggest a possible turn in the pair as it may once again targets the 3/05 low of 115.14 for a possible double bottom test.

GBPUSD – The triple top that is forming in the GBPUSD that we referred to yesterday continues to play out. The formation is confirmed further by the divergence on the momentum oscillators such as MACD. Only a break and a close on a daily basis of the recent 1.9823 swing high would negate the current down trend scenario.

USDCHF – The steady downtrend in USDCHF on the higher time frame seems to be butting heads with the correction the pair has lived out since 3/16. Aside from merely testing resistance from the channel top, nearby resistance at 1.2240 has proven itself with an intra-day triple top and a number of fibs that are subsequently pulled from various key waves. For the 240-minute time frame, the most pertinent wave is the bear run from the 1/31 high to the 3/16 low, whose 38.2% is playing the part of resistance.

USDCAD – After working on two green bars, USDCAD has begun to pull back from yesterday’s highs. Should the high stay in place it would provide further confirmation to the short-term, downward slopping trendline that begins with the 3/26 high. While a pull back to the bigger trend channel bottom may be in the works, technicals still favor a bigger rebound than what has developed so far this week. With a big 38.2% fib of the 1.0930-1.1879, channel support and a bullish divergence on the MACD, the market will eye 1.15 closely.

AUDUSD – Though AUDUSD may be nearing the end of a long-term uptrend, bulls are not ready to let give the pair up just yet. In the Asian and European sessions, price action put in the necessary components for a massive daily, reversal candle. This adds weight to support through demand, though the steep pitch of the past month’s rally can only last so long before AUDUSD goes into congestion to relieve some of the overbought sentiment in the market. Resistance is not far above spot at .8215, giving short-term bulls an objective.

NZDUSD – Like AUDUSD, NZDUSD has reinstituted the long-term uptrend. However, also like its sister pair, NZDUSD has not yet surpassed last month’s highs. Spot will need to surpass the 4/2 intraday high to confirm an extension of the wave that began after the turn higher at .7080. To validate a pivotal turn on the higher time frame, a number of support levels will have to be sacrificed. First and foremost, the rising trendline from 3/18 needs to be breached before bears target .7165 and .7080 further down.

Glossary of Terms
CCI(20) – 20 day Commodity Channel Index
> 0 – bullish
0 > – bearish
> 100 – extremely bullish
-100 > - extremely bearish
RSI(14) – 14 day Relative Strength Index
> 50 – bullish
50 > – bearish
> 70 – overbought
30 > - oversold
MACD ? - MACD slope (MACD – MACD[1])
> 0 – bullish
0 > - bearish
Mom(21) – 21 day Momentum
> 0 – bullish
0 > - bearish
ATR(14) – 14 day Average True Range (volatility)
Medium – 75th percentile* > ATR(14) > 25th percentile*
High - > 75th percentile*
Low – 25th percentile* >
*measured against past 3 months