Euro Crosses May Produce a Short Term Bounce


EURAUD – Last week we said, “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).” Given the bounce at the aforementioned trendline, near-term resistance is now seen at immediate spike-highs of 1.6393. The lack of a sustained break above a month-long trendline leaves immediate risks to the downside. A break of Fibonacci support and the 4/13 low of 1.6211 leaves 1.5963 as the next clear floor.

EURCAD – We continue as long-term bears of the EURCAD, following the significant turn at a long-term Fibonacci level, a nine-year downward sloping trendline, and a bearish candlestick pattern on the monthly charts. (See the 4/16 report for charts) Near term, the pair is testing support of a three-month rising trendline at approximately 1.5300. A sustained break below may stall at a falling trendline and spike-lows of 1.5249, but stronger support comes in at the 2/22 low of 1.5172. A negation of the bearish outlook comes only on a break above the 3/26 high at 1.5516.

EURNZD – The EURNZD has effectively tested and posted a short-term bounce off of a significant 61.8% Fibonacci (1.6326-2.1187) but its inability to clear a month-long downtrend at 1.8235 may eye a second attempt at this figure. Given a bullish divergence on the daily RSI and a trendline right below, drops may stall near the 1.8120 mark. A short-term bounce eyes the aforementioned monthly line currently at 1.5380 (falling approximately 20 points a day), with a break above leaving retests of 1.8554 and 1.8617 as a distinct possibility.

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