The EURUSD likely faces a formidable challenge near 1.49. A sharp reversal at that point is not out of the question.
Last night’s comments were that “the EURUSD is vulnerable to a pullback soon (in a wave iv correction).” That correction is either complete at 1.4680 or is underway towards the 1.4591-1.4631 zone. Either way, higher prices are expected. Resistance is stacked between 1.4919 and 1.5177. Pride ideally remains above 1.4546. I’ll look to issue an alert in the day(s) ahead regarding pattern development in the Forex Alerts section.
The bearish level in the sand now is 106.90. There is potential for the USDJPY decline to accelerate as long as price is below there. Very short term, 106.21 may serve as resistance.
There is no reason to alter the bullish view but watch for resistance near 1.878. This is the confluence of the 38.2% of the entire decline from 2.1160 as well as daily highs from August. Not shown on the chart is a Fibonacci extension at 1.8815. In summary, expect strength to continue into roughly 1.88, but then the GBPUSD will be vulnerable to a wave iv corrective decline. Price should remain above 1.8280.
The USDCHF fell hard in what may be a C wave. C waves unfold in 5 waves and the decline from 1.1284 is not yet in 5, so expect additional weakness; until 5 waves from 1.1284 develop or until there is evidence of a larger USD turn. A Fibonacci extension at 1.0457 may provide support in the coming days.
The rally from .9055 is in 3 waves (corrective). This could be just the first 3 wave move in a more complex move (flat?) or a completed 3 wave correction. In either case, the USDCAD likely heads much lower from here. The first support is not until the center of the triangle; at 1.01.
The advance from .7799 is impulsive and probably wave A of an A-B-C zigzag. A wave B decline may be underway now that should bring price back to at least .8266 before strength resumes.
A countertrend move back to the .7200 area or higher is probably underway. This level intersects with the underside of a former support line that was broken in August. Near term, the NZDUSD may be nearing the end of a 3 wave movement from the low. While this could be the first leg in a triangle or flat, short term risk is shifting to the downside.
[B]Jamie Saettele writes [I]Forex Technicals: The Day Ahead[/I], Monday-Thursday (published at 6 pm EST), [I]Daily Technicals [/I]every weekday morning (9 am EST), COT analysis (published Monday mornings), and analysis of currency crosses throughout the week. He is also the author of Sentiment in the Forex Market.[/B]
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