British Pound Crosses Mark Time in Ranges

-GBPCHF tests low of range but vulnerable
-GBPCAD at 55 day SMA
-GBPAUD supported by moving averages / trendline

[B]British Pound / Swiss Franc[/B]

The rally from the December low reached 1.75 and the advance is in 3 waves and fits as wave 4 within the 5 wave decline from the 2007 high. A drop below 1.5113 (December low) could occur in order to complete 5 waves down. It is also possible that the GBPCHF has entered into a longer term range. Even so, the pair likely ranges at lower levels (could be a flat or triangle). Staying below 1.75 keeps the trend down.

British Pound / Canadian Dollar[/B]

There may be an inverse head and shoulders forming in the GBPCAD from the beginning of 2009. There is potential support in the 1.7344-1.7160 zone. This is the 61.8% of the rally from 1.6711 to 1.8418. A rally above 1.8418 would present a breakout opportunity. The red line on the chart is the 55 day SMA, which is resistance at the current juncture.

British Pound / Australian Dollar[/B]

The series of higher highs and higher lows since the January low is bullish. Price is also above both the 55 day SMA (blue) and 233 day SMA (red). There is the potential for weakness below 2.1730 prior to a bottom and test of 2.2880. Trendline support is just below 2.1730 from a line drawn off of the January 5th and January 26th lows.

British Pound / New Zealand Dollar[/B]

A multi-year triangle has been underway in the GBPNZD. I had previously thought that wave e was complete but this seems unlikely after reconsideration given how little time wave e has consumed. Waves a through d took 9, 19, 9, and 4 months. Wave e is in its second month. Expect consolidation / upward pressure over the next few months before wave e is complete. Price ideally remains above 2.5625 on its way to 3.00.

Jamie Saettele publishes Daily Technicals every weekday morning (930 am EST), COT analysis (published Monday mornings), technical analysis of currency crosses throughout the week (EUR on Tuesday, JPY on Wednesday, GBP on Thursday, AUD on Friday), and the DFX Trend Index every day after the NY close. He is also the author of Sentiment in the Forex Market.

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