Daily Forex Trend Report

-British Pound buying opportunity in 1.4140-1.4070 zone.
-USDJPY selling opportunity in 96.60-97.25 zone
-EURUSD, AUDUSD, and NZDUSD approach resistance

[B]About the DFX Trend Index
[/B]
The DFX Trend Index ranges from -100 to +100 and is updated everyday at 5 pm eastern US time. On the charts, bars are painted blue if the index is above 50 (uptrend) and red if the index is below -50 (downtrend). Readings between -25 and +25 result in a green bar to indicate that price has reversed to the mean. The spreadsheet shows the index values for the last 15 days.

50 to 100: uptrend / potential for a top increases the closer the index is to 100
25 to 50: in a range / bullish potential

-25 to 25: price has reversed to the mean

-50 to -25: in a range / bearish potential
-100 to -50: downtrend / potential for a bottom increases the closer the index is to -100

[B]
EURO / US DOLLAR[/B]

The trend index is at 85, which indicates uptrend / topping. There are multiple levels of resistance ahead. 1.3540 and 1.38 are Fibonacci levels and the 1.36-1.3960 is the first of year (FOY) pivot zone. While additional upside is possible to mentioned levels, the bulk of the rally from 1.2475 may be over. Having rallied for 7 consecutive days, it is best to take some profits off of the table.

[B]
BRITISH POUND / US DOLLAR[/B]

The trend index is at 8, which indicates range / bearish potential. A setback to support in the 1.4070-1.4140 zone would present an opportunity to go long against 1.3840.

[B]
AUSTRALIAN DOLLAR / US DOLLAR[/B]

The trend index is at 68, which indicates uptrend / topping. The AUDUSD is in a position similar to the EURUSD in that it is approaching resistance (.6850). Remember, my favored count has the AUDUSD exceeding .7275 before a top is in place. Still, bulls may wish to take some off of the table at .6850.

[B]
NEW ZEALAND DOLLAR / US DOLLAR[/B]

The trend index is at 72, which indicates uptrend / topping. The interpretation is the same for the NZDUSD as for the AUDUSD. Be aware that there is potentially strong resistance at .5450 (now) and .56.

[B]
US DOLLAR / JAPANESE YEN[/B]

The trend index is at 65, which indicates uptrend / potential for a top. The USDJPY appears to have topped. Look to sell rallies. The resistance zone is 96.56-97.25. Risk is at 99.

[B]
US DOLLAR / CANADIAN DOLLAR[/B]

The trend index is at 36, which indicates range / bearish potential. Daily structure is bullish as long as price is above 1.2350. As each day passes though, the bull side looks less and less appealing.

[B]
US DOLLAR / SWISS FRANC[/B]

The trend index is at 42, which indicates range / bearish potential. I wrote in the last few trend reports, that “last week’s surge (over 400 pips) made a mess of structure. It is worth noting though that such spikes tend to mark the end of a move more often than the beginning of a move.” The move was the end and the USDCHF is expected to test Fibonacci support, which begins at 1.1284 and extends to 1.0925.

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.

Please send comments about this report to <[email protected]>