The EURGBP is geared up for a test of its high. A break higher would expose a target near .95. The EURCAD is back above its wedge and there are signs that the EURAUD and EURNZD are in the early stages of reversing higher. Yen crosses are attempting downside breaks.
[B]Euro / British Pound[/B]
Former resistance held as support (as so often occurs) in the EURGBP just below .9100. I wrote Wednesday to “expect a push through .9306 as long as channel support holds”. There is no change to this outlook. A potential target is .9466 (which is where the rally from .9076 would equal the .8453-.8843 advance). This is also close to former chart resistance at .9507. .9150 is short term support.
[B]Euro / Swiss Franc[/B]
“There is little to say about the EURCHF technically and there will not be until the pair breaks from the triangle. The fight between bulls and bears wages on in a triangle that has been underway since October. Triangles are typically continuation patterns, so a downside break seems more probable. Still, forecasting is an exercise in probabilities rather than certainties so jump the gun at your own risk. Pushing through either the top of bottom line triangle line would present a breakout opportunity.”
[B]Euro / Canadian Dollar[/B]
I wrote Wednesday that “break from the channel is bullish but price needs to hold above the support line. The long term target is above 1.7500.” The support line brought an end to weakness on Thursday and the EURCAD his back above the wedge. Favor the upside although dips could test support at 1.5775, 1.5730, and 1.5680.
[B]Euro / Australian Dollar[/B]
“As mentioned in recent weeks, daily momentum studies are divergent with price lows. This warns of a low, but until a bullish price pattern emerges, going long is dangerous.” The turn higher from the short term (albeit downward sloping) support line is a good start. I can envision an inverse head and shoulders pattern (notice the multiple left shoulders) forming over the next few weeks. 1.6680-1.6750 is a short term support zone.
[B]Euro / New Zealand Dollar[/B]
Trendlines are meant to be broken. The number of recent tests of the EURNZD line suggests that once broken, the rally could be exceptionally strong. The recent low could be significant given that it occurred at a once important resistance area (see arrow). 2.0250 is potential support.
[B]Euro / Japanese Yen[/B]
For the past 6 + months, the pair has traded in a large sideways (slightly contracting) range. The pattern could be just a consolidation prior to additional gains or a significant distribution and therefore reversal. There is the specter of a head and shoulders top. Coming under the neckline (tested, but no daily close below yet) would turn conditions bearish. It is possible that the EURJPY has formed a triangle since the end of April. Trading above 135.52 would favor this interpretation. Levels that likely serve as resistance are 132.45 and 133.30.
[B]British Pound / Japanese Yen[/B]
Target areas are 139.00 (100% extension) and 130.40-131.40 (161.8% extension and a March pivot). The line extended from the August and 9 and 23 highs can be used as a point of reference from which to short. That line is at 147.27 Monday and decreases 40 pips per day. Former support at 146.74 reinforces resistance at the line on Tuesday.
[B]Swiss Franc / Japanese Yen[/B]
The CHFJPY is in the same position as the EURJPY. Is the multi month range a consolidation or reversal? Time will tell. A break below the neckline (tested today but held) would suggest that the next move is lower. 87.80 and 88.15 would be resistance on a push through 87.35.
[B]Canadian Dollar / Japanese Yen[/B]
The CADJPY has broken below a support line but the 200 day SMA has held. The near term trend is down against 86.07. 84.72 is potential resistance on a rally above 84.23.
[B]Australian Dollar / Japanese Yen[/B]
The AUDJPY spiked below 76.39 (range low) today and is below its support line. Favor the downside against 80.08. The next level of chart support is not until 70.74.
[B]New Zealand Dollar / Japanese Yen[/B]
A clear wave pattern can be seen in the structure of the NZDJPY rally since February. The advance is an A-B-C correction with wave C as a diagonal. Price broke below the lower diagonal line yesterday but a longer term support line has held so far. Still, the diagonal implications are bearish. Reversals following diagonals are usually sharp. 65.30 is potential resistance.
Jamie Saettele publishes Daily Technicals every weekday morning, COT analysis (Monday), technical analysis of currency crosses on Monday, Wednesday, and Friday (Euro and Yen crosses), and intraday trading strategy as market action dictates. He is the author of Sentiment in the Forex Market. Follow his intraday market commentary at [DailyFX Forex Stream](javascript:void(0);/1254505290201/).
[I]Contact Jamie at <[email protected]> if you would like to receive his reports via email[/I].