The EURCAD is testing head and shoulders neckline support. The pattern is in its 20th month so a break would be significant. The Yen crosses remain on a path towards higher prices although the risk of pullbacks is increasing.
[B]Euro / British Pound[/B]
I put out an alert yesterday that read - “I’ve advocated long positions in the EURGBP for weeks but today’s reversal just shy of an important 100% extension leaves the pair vulnerable to weakness in a 4th wave back to .9076 or so since the rally may have completed a third wave from .8453 (which is 5 waves itself). RSI has spent most of the time since mid September in overbought territory and is divergent with the high. The pair could see one more high prior to reversing of course but the risk of a correction outweighs the potential for additional gains at this point. Coming under .9280 would signal that a larger correction is likely underway. Those that want to minimize risk but remain exposed in hopes of additional upside should keep a stop below there.” There is no change to these comments.
[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.” The triangle count shown above is bearish but a bullish outcome is just as probable. Wave a would be A and wave B would be a triangle.
[B]
Euro / Canadian Dollar[/B]
A head and shoulders top has been unfolding since January 2008. Price is right at the neckline now and the decline is impulsive in structure. 1.5390-1.5440 is a resistance area (has held so far) and price ideally remains below 1.5500 with 1.5662 being the line in the sand. 1.5000 is a short term objective (161.8% extension of wave 1). There should be larger pullbacks down the road that will let us enter at a better price.
[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 EURAUD continues lower and there is little likelihood of any support until 1.6040. 1.5920 is former support as well and intersects with a downward sloping line on October 21st (next week).
[B]
Euro / New Zealand Dollar[/B]
There is evidence that the EURUSD may be building a bullish base. The low that was made on 10/8 has held and price is respecting a short term support line. Trading above 2.0276 would warrant adoption of a bullish stance. Exceeding that level would also mean that a longer term resistance line has been broken.
[B]
Euro / Japanese Yen[/B]
A B wave triangle is complete at 129 and expectations are for a C wave rally that carries the EURJPY to the mid 140s (at least). Long term measured objectives are 144.73 and 154.44. A short term measured level (from short term head and shoulders break) is 134.00. The risk of a pullback (back to 131.70-132.20) is increasing but the bigger picture bias remains bullish.
[B]
British Pound / Japanese Yen[/B]
The GBPJPY may be close to completing wave i of larger 5 down. Trading through 144.60 would confirm that wave i is complete and project a move towards the 149.00-150.00 area (and maybe higher). Until a rally through 144.60, the pair remains vulnerable to further losses.
[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. Having held the support line and turned up with conviction, the upside looks more probable at this point. Structurally, the entire advance from the December 2008 low may be a complex W-X-Y correction (wave X is a triangle). Long term objectives are 94.86 and 100.74. Beware of resistance in the 88.50/90 area (former support). Similar of course to the EURJPY, the risk of a pullback to 86.75-87.20 is increasing but the big picture remains bullish.
[B]
Canadian Dollar / Japanese Yen[/B]
The decline from 90.41 is a complex correction (double zigzag) that will probably be entirely retraced. 85.70-86.05 is a support zone and price ideally stays above 84.23 in order to keep the impulsive structure intact (no overlapping waves). Again, a new high (above 90.41) is expected eventually.
[B]
Australian Dollar / Japanese Yen[/B]
The AUDJPY decline from 82.05 is of the complex corrective form as well. 80.74 and 80.08 are levels where one should expect support. Other crosses present better opportunities however as the AUDJPY has already traded to its August high…
[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. Reversals following diagonals are usually sharp (but the diagonal is probably not complete yet). A target remains 69.10, which is the 100% extension of wave A. 64.80 is potential support.
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.
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