Dollar Rally Accelerates; Pairs Reach Important Levels
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Written by Jamie Saettele, Senior Currency Strategist
The US dollar rally has accelerated (except against the Yen). The GBPUSD has has nearly reached the 61.8% retracement of its entire rally from 2001. The USDJPY could break below 95 soon.
As mentioned the past 2 days, remaining below 1.3535 keeps the extremely bearish count on track. Fibonacci extensions place the target area for a 3rd of a 3rd wave down (within the 5 wave drop from 1.60+) at 1.1437-1.1764. I also mentioned though that �I am not confident in this �breakdown� count.� So far, the EURUSD is breaking down and picking a bottom is not ideal. That said, there are now 2 equal legs down from 1.6040 and RSI is at 20 and divergent. An A-B-C decline could be close to complete. An intraday impulsive rally would warrant a bullish bias. Until then, bears are in control and the target area is the mentioned 1.1437-1.1764 zone.
Continue to favor the downside as long as price is below 102.46. This keeps the longer term bearish count intact in which the USDJPY will accelerate lower and drop below 95.72. 100, which was intraday support, could now serve as resistance.
The drop from 2.1166 has nearly retraced 61.8% of the entire rally from 1.3680. Weekly RSI is oversold and divergent, so be on the lookout for a reversal.
This article continues HERE, and includes analysis of the USD/CHF, USD/CAD, AUD/USD, NZD/USD.
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