Euro Commodity Cross Declines are Corrections


Commentary - We wrote last week that the “although price remains above 1.6400, the rally from 1.6400 was also in 3 waves, indicating that at least one more bear leg will occur. Potential support is at the 61.8% of 1.5473-1.7450 at 1.6228, the 78.6% at 1.5896 and the 100% extension of 1.7450-1.6400/1.6852 at 1.5802. This move down should prove terminal and result in the opportunity to get bullish against 1.5473 for a move through 1.7450.” The pair has tested and is currently at the first potential reversal point of 1.6228. There is no sign of a reversal yet as the bounce from 1.6174 is in 3 waves. With this in mind, lower prices are likely.
Strategy - Look to buy near 1.5807, against 1.5473, target is above 1.7450

Commentary - We are showing the monthly today because the EURCAD may be nearing a significant bottom. A triangle may be close to complete from the October 1998 high at 1.9211. If this is the case, then the EURCAD could begin a multi-month rally in the next few weeks. This is something to watch closely as we move forward.
Strategy - Flat

Commentary - We do not a have a good handle on the EURNZD. A flat correction may be unfolding from the 8/17 high of 2.0170. If this is the case, then price should find support no lower than the 61.8% of 1.7029-2.0170 at 1.8231. If the bullish bias is correct, then the next leg up should challenge the July 2006 high at 2.1187.
Strategy - Flat

Written by Jamie Saettele, Technical Currency Strategist of