[B]Euro / British Pound[/B]
The EURGBP has strengthened in what I have treated as a small 4th wave. Price is testing the former 4th wave extreme at 8800 now; which is a common area for corrections to end. I’ve been expecting a final small 5th wave to complete the decline from 9158. However, the large degree correction (possibly a triangle) may be underway from the December 2008 high, so it is possible that the decline is complete as wave c of the triangle. A daily close above 8832 would bolster near term bullish prospects.
[B]Euro / Swiss Franc[/B]
Last Friday, the EURCHF has its biggest daily range (286 pips) since June 24, 2009 (which was 378 pips). The spike reversed in the center of a resistance zone and within a pip of parallel channel resistance. Continue to favor the downside, against the spike high. Additional weakness targets the 2008 low at 14300.
[B]Euro / Canadian Dollar[/B]
Staying below 14780 keeps the trend pointed lower towards the February 2008 low at 14405 then the December 2007 low at 14139. Trading above 14780 would signal an upside reversal (seems probable at this point given my bearish stock market forecast, which implies risk aversion). 14678 is potential short term resistance.
[B]Euro / Australian Dollar[/B]
With 5 waves down from 16633, it is possible that an important low is in place for the EURAUD. I continue to favor the upside against 15586. Trading above 15965 would bolster bullish prospects. On the downside, a break below 15412 would shift focus to the 2000 low at 14991.
[B]
Euro / New Zealand Dollar[/B]
The EURNZD decline from 21267 may be complete in 5 waves, which means that a more important low may be in place. The move above 20029 increases confidence in the upside. Favor additional gains above 19558. 20454 is the next chart level that could provide resistance. 20750 is also an objective (161.8% extension).
[B]
Euro / Japanese Yen[/B]
I issued a warning of sorts on Monday, stating that “understand that in these volatile markets, there is always the risk of a violent short covering rally. In such an event, the EURJPY could exceed 12336 and test former support at 12440. The trend is down against 12701.” After doing exactly that, the pair has come off. Still, the potential for additional corrective does remain. The key level is 12701. It is like the EURJPY to lull us to sleep before its next big move (down) – that may be what is happening here. The initial downside target is 11544.
[B]British Pound / Japanese Yen[/B]
“Big picture, it remains my contention that the rally to 16310 completed a 4th wave correction and that the GBPJPY will eventually decline to a new low beneath 11879.” Like the EURJPY, the trend is down and if you want to catch the big moves, you must be willing to sit through corrections. 14150 ideally holds but 14240 would be resistance if needed. 12688 is the 100% extension of the prior down move and is the initial objective. The trend is down against 14535.
[B]Swiss Franc / Japanese Yen[/B]
The CHFJPY is in the same situation as the EURJPY. Like the EURJPY, respect the potential for additional corrective action. The trend is down against 8645.
[B]
Canadian Dollar / Japanese Yen[/B]
I maintain that a 3rd wave lower is underway in the CADJPY as long as price is below 8615. 8500, which intersects with a trendline tonight (Wednesday) is potential resistance. Ultimately, I am anticipating a break below 7990.
[B]Australian Dollar / Japanese Yen[/B]
“Bigger picture, the AUDJPY rally from the October 2008 low is in 5 waves and probably wave A of a multi year A-B-C correction. Most important is wave 5 of the rally, which is an ending diagonal. Ending diagonals are often fully and sharply retraced. This places a bearish target at 7074.” Favor the downside against 8073.
[B]New Zealand Dollar / Japanese Yen[/B]
The larger trend is considered down against 6471. Bigger picture, the rally from 5259 is a diagonal and expectations are for a full retracement of that rally. Former support at 6273 has serve as resistance thus far. 6300 intersects with a trendline tonight.
Jamie Saettele publishes Daily Technicals every weekday morning, COT analysis (published Friday evenings), technical analysis of currency crosses on Monday, Wednesday, and Friday (Euro and Yen crosses), and intraday trading strategy as market action dictates at the DailyFX Forum. He is the author of [I]Sentiment in the Forex Market[/I]. Follow his intraday market commentary and trades at DailyFX Forex Stream. Send requests to receive his reports via email to [email protected].