Euro 1.3200 Will Be Difficult
Japanese Yen Turns at 119
British Pound Weekly Close Below Trendline
Swiss Franc Trading Near 200 day SMA
Canadian Dollar Digests Gains
Australian Dollar Turns Over at Trendline
New Zealand Dollar Strongest of the Bunch
EURUSD While one more high above 1.3174 is possible, we maintain that this could be a MAJOR top (the end of an A-B-C correction from 1.2865). Only a break below 1.2865 confirms that wave 3 down is underway. A break of 1.2865 would shift focus to 1.2667, which is where the 1.3370-1.2865 decline would equal the decline from 1.3174. Again, one more high in the 5th of the C wave is possible but dont expect a rally to push much beyond 1.3174.
USDJPY We said Friday that One more low is likely given the RSI extreme in place (240 minute) at 119.17. Rarely does a market turn up (or down for that matter) following a momentum extreme. One more low would create bullish divergence with oscillators and free up the USDJPY for a rally. Still, this pair is nearing at least an interim bottom if not a major one. The 78.6% of 117.97-122.21 at 118.89 may be the level at which the USDJPY ultimately turns higher. The USDJPY has turned from 118.99 in what could be a resumption of the longer term uptrend. For more on the USDJPY, see http://www.dailyfx.com/story/special_report/special_reports/A_Dip_in_a_Long_1171644703102.html
GBPUSD The longer term wave structure suggests that a major top is in place at 1.9915. In fact, the rally from 1.8090 traced out an ending diagonal. Ending diagonals are often fully retraced. A decline below 1.9260 strongly suggests that a top is in place at 1.9915. A weekly close below the short term trendline last week bolsters the shorter term bearish case. In the very short term, Cable may be in a 3rd wave. If this is the case, then measured support doesnt begin until 1.9351 which is where the decline from 1.9568 would equal the decline from 1.9680 to 1.9464.
USDCHF Little has changed regarding the USDCHF. An A-B-C correction from 1.2575 may have ended at 1.2316. Additional support is at the 38.2% of 1.1878-1.2575 at 1.2310. The analysis is the same as the EURUSD (but in the inverse). That is, we are looking for a bottom. The pair has slipped below the 200 day SMA but only by the barest of margins. Very short term resistance is at the former support shelf of 1.2376. A break above there exposes the high from 2/15 at 1.2412.
USDCAD Fridays turn lower likely marks the resumption of the long term downtrend. Long term focus is to below 1.0927. There are (or nearly are) 5 waves down from 1.1879 so now is not the time to get short term bearish. A bounce to Fibonacci support could see the 38.2% at 1.1718 or the 50% at 1.1749 (which is also the 4th wave of one lesser degree). The USDCAD may make one more low prior to a rally as small ending diagonal may be forming from 1.1692. Support is former resistance at the 2/15/2006 high at 1.1591.
AUDUSD We said Friday that A level to watch is the confluence of the 78.6% of .7941-.7697 / trendline drawn off of the 1/3 and 1/23 highs at .7888. The AUDUSD reversed at .7889 this morning. This may be the beginning of a longer term downtrend to below .7698. Short term support is at the 2/16 low at .7829. .7889 is critical resistance.
NZDUSD Kiwi has broken through its resisting trendline today and made a run on the 1/25 high at .7037. Given the proximity of resistance at .7037, upside risk is well defined. Todays spike low at .6934 is support but a decline below would suggest additional bearish potential.
