The majors have been run up to dollar support; but the presence of significant support levels and drop in volatility through the week’s end should make for an interesting open on Monday.
The wave 3 that Jamie has put the EURUSD is playing out, and perhaps more quickly than we had expected. High volatility has driven the pair beyond the July 3rd high just around 1.5900. However, given the retracement of the early morning break, it is unlikely that the pair will make a concerted test of record highs before the weekend liquidity drain. However, looking through to next week, the late-April swing high is likely to be a target for wide euro buying.
Visit our recently updated Euro Currency Room for specific resources geared towards this currency.
STRATEGY: Bullish, against 1.5611, target is above 1.6018 (near 1.63)
Direction continues to elude the USDJPY. The sharp drop off seen this morning has run into a heavily fortified support area between 105.70-106. In the area are a confluence of minor and major fib retracement levels, the rising 50-day SMA and the rising trend since April. The test of this level will be critical in determining long-term direction as the upside has hit its head against the long-term falling trend seen through trendlines and a 200-day SMA. If volatility picks quickly after trading begins again on Monday, we may finally see the long-awaited breakout in that same week.
Visit our recently updated Yen Currency Room for specific resources geared towards this currency.
Today’s broad dollar selling has brought GBPUSD a few steps closer to Jamie’s first target. The rally has clearly triggered the next run, but the question now is whether the market can pick up with the same pace at the open of next week. This is unlikely and consolidation is almost certain. Should bulls gather their footing before a natural retracement, however, the next move will be on 2.0000 which represents not only a psychological level and frequented pivot point, but also a 61.8% fib of the 2/20 to 3/14 rally.
Visit our recently updated British Pound Currency Room for specific resources geared towards this currency.
STRATEGY: Bullish, against 1.9648, target 1 at 2.0175, target 2 TBD
USDCHF’s loyalties seem to be shifting away from the euro correlation back to USDJPY-like formations. Like the yen pair, the USDCHF has found itself at support in a broad wedge formation that may be calling for a breakout. On the other hand, traders have 300-points plus of range to trade with; so the pressure for a significant break are far less than that seen in its yen-counterpart.
Though the dollar was dropping across the market, the currency was able to hold its own against the loonie. The drop in USDCAD made for a low around 1.0067 – close to the triangle limit Jamie has held with over the past week; but not close enough to put it in jeopardy just yet. The pair has already bounced from its lows and the week looks to end well with the technical formation. Next week may be a different story however, and we will need to see how this congestive price action plays out.
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STRATEGY: Bullish, against .1.0047, target above 1.0324
Among the majors, only the AUDUSD has produced a milestone move against the greenback. The pair cleared the previous high set in June 30th around 0.9670 to push to a new intraday, 25-year high just short of 0.9720. Considering this pair’s consistent bullish momentum, however, this doesn’t come as a surprise. With today’s move, spot has moved up to Jamie’s initial target; but momentum will likely make for a higher objective next week. Risk will be kept at 0.9475 to secure against this week’s swing low and the rising trend.
STRATEGY: Bullish, against .9475, target above .9668 (probably near 1)
NZDUSD has returned to the same area that Jamie suggested would close the A-B-C formation of two weeks ago. Though with volatility already quickly receding, it does not look like his preferred extension to around 0.7680 will be reached today. While such a high may be found early next week, the presence of staggered resistance above will likely encourage congestion before a breakout to Jamie’s target is found.
STRATEGY: Bullish, against .7445, target .7720