-EURGBP to test February low
-EURCHF 1.49-1.50 is support zone
-EURCAD to drop beneath 1.5633
-Massive EURAUD outside day
[B]
Euro / British Pound[/B]
Long term, there is a strong bearish bias against .9507. Price is clearly well below that level now but it is possible that the drop from .9507 is in a 5th wave now that will result in a temporary low. There is potential support from the February low at .8634. Be careful on a drop below there. Many will view the weakness as a breakout opportunity when the EURGBP is probably completing 5 waves down. A corrective advance back to at least .90 would be the next likely move.
[B]
Euro / Swiss Franc[/B]
Near term, there is potential for weakness in the EURCHF below 1.5059 and towards 1.49 (61.8% of 1.4575-1.5450 and the 100% extension of the 1.5450-1.5059 decline). A drop to there may present an opportunity to position long against 1.4575 in anticipation of a rally through 1.5886 (5 waves up to 1.5886 and 3 waves down to 1.4575).
[B]
Euro / Canadian Dollar[/B]
The drop below the 55 day SMA and support line drawn off of the November 5, February 10, 24, and 26 lows argues for additional downside (below 1.5633), possibly to complete a correction from 1.7522. In fact, a small 4th wave may be complete at today’s high. Price should stay below 1.6378 (wave 1 extreme) on its way to below 1.5633 (after which an important low is expected to form).
[B]
Euro / Australian Dollar[/B]
The EURAUD has dropped below the 200 day SMA, which brings forth the possibility that a longer term drop is underway. However, there is a pattern that warns of a bottom. Since the October high at 2.1174, it is possible that an A-B-C drop is nearing completion with wave B as a triangle. I wrote last week that “RSI is in oversold territory and turning up so a low may form soon. Watch 1.80 as a support level.” The EURAUD spiked below 1.80 and made a low yesterday at 1.7833. The massive outside bar engulfs the previous 6 trading days. Trading above 1.8591 would confirm the bar as a reversal.
[B]
Euro / New Zealand Dollar[/B]
Remember, the long term objective is above 2.6171 (all-time high). The reason for this target is that a triangle unfolded from that point. Near term, the EURNZD has declined from the top of a parallel channel. The bottom of the channel is potential support and crosses 2.2220 today. The line increases 18 pips per day.
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.
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