Euro Commodity Crosses Look for Support


EURAUD – The long term trend, as indicated by the nearly 9 year trendline, is down (see last week’s chart). The long term triangle offers the best perspective. Price should come down to test 1.6304 in the E wave of the triangle (triangles have 5 waves A thru E). The pair is about to make a weekly close below the January low of 1.6304, which increases confidence in our longer term bearish outlook. Near term, a rally attempt is due with a possible 5 waves down from the 3/6 high at 1.7041. There is also support from the confluence of the 61.8% of 1.5530-1.7358 and a downward sloping support line on the daily (see below).

EURCAD – We have been bearish EURCAD due to the 9 year trendline, bearish divergence with weekly oscillators, and the shooting start monthly candle (March candle). The next major support level is the January low at 1.5082 with a break lower targeting the August 2006 high at 1.4592. Near term, price has held up at the short term trendline drawn off of the 1/15, 2/23, and (now) 4/12 lows. A daily close below this line opens up the door for an attack on 1.5082. 1.5516 should be strong resistance.

EURNZD – EURNZD has broken to 13 months lows and appears to have eyes for the 61.8% of 1.6326-2.1191 at 1.8185. We are looking for a corrective rebound in EURAUD, but the EURNZD may chop lower to test this fibo level. A break lower in AUDNZD, which is currently testing a short term support line, would fit with our view. Still, with an apparent 5 waves down from 1.9497, the risk of a corrective rally towards the former 4th wave at 1.8853 is high.

CCI(20) – 21 day Commodity Channel Index
> 0 – bullish
0 > – bearish
> 100 – extremely bullish
-100 > - extremely bearish
RSI(14) – 14 day Relative Strength Index
> 50 – bullish
50 > – bearish
> 70 – overbought
30 > - oversold
MACD ? - MACD slope (MACD – MACD[1])
> 0 – bullish
0 > - bearish
*measured against past 3 months