Dollar / Yen Resuming Long Term Decline?

-EURUSD stalls ahead of resistance levels
-GBPUSD support at 1.4320/75
-AUDUSD possible head and shoulders continuation
-NZDUSD at 61.8% Fibonacci
-USDJPY long term decline resumption

[B]Euro / US Dollar[/B]

The diagonal has been fully retraced (began at 1.3333) and then some. In fact, the EURUSD has exceeded the 50% retracement of the decline from 1.4723 and is closing in on the 61.8% at 1.3811. The 200 day SMA is at 1.3907 and sloping down. As mentioned yesterday, I’ll be looking to go short over the next several weeks. The longer term trend is still viewed as down since the decline from 1.4723 is an impulse.

[B]British Pound / US Dollar[/B]

The break through the top of the channel that contained wave B signals that wave C (flat) is most likely underway to above 1.50. A triangle is still possible but the flat is favored as long as price is above 1.4154. Look to buy dips at support in the 1.4320/75 zone (Fibonacci).

[B]Australian Dollar / US Dollar[/B]

While the AUDUSD trend is still strongly bullish, price action since the October 2008 low has carved out what could be a head and shoulders continuation pattern. This is pure speculation at this point but the ‘look’ is there. Needless, stay bullish as long as price is above .6810…the objective remains above .7275.

[B]New Zealand Dollar / US Dollar[/B]

As mentioned in recent weeks, “the bullish target zone / potential topping area for the NZDUSD is between .5457 (former 4th wave and 50% retracement) and .56 (61.8% retracement).” Price has reached the upper end of this area, which increases the risk of a strong pullback. Still, stay bullish as long as price is above .5460 (target at .58).

[B]US Dollar / Japanese Yen[/B]

The longer term USDJPY decline may have resumed. The advance from 87.09 is in 3 waves and price has dropped below the wave A high at 94.67, confirming that the decline is in 3 waves (and can not become an impulse). 96.20/90 is the zone to sell into, against 99.

[B]US Dollar / Canadian Dollar[/B]

The drop below 1.2350 negates the previously held bullish bias. The USDCAD did exceed its wave 3 terminus on March 9, so it is entirely possible that that advance completed wave 5 within a 5 wave advance from the 2007 low. Price has also dropped beneath its 55 day SMA, which favors bears.

[B]US Dollar / Swiss Franc[/B]

Watch for USDCHF support from Fibonacci all the way down to 1.0925. The decline from 1.1973 is wave C of a flat (an extremely violent flat at that) that should lead to formation of a secondary low (primary low was 1.0367) in the next few weeks.

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]>