-EURGBP below 200 day SMA
-EURCHF only pair with bullish potential
-EURCAD drops below support line from late 2007
-EURAUD and EURNZD significant long term bearish implications
Euro / British Pound
The break below .8634 exposes a low in November 2008 beat .8230 (this is the next level of chart support). Quite simply, the series of lower highs and lower lows is bearish as is the daily close below the 200 day SMA. Price ideally remains below .8872 on its way to .8230.
Euro / Swiss Franc
The EURCHF remains bullish. A small 2nd or b wave may be complete at 1.5006. The next expected move is higher; through 1.5450 (and possibly 1.5886).
Euro / Canadian Dollar
The drop below 1.5462 negates the previously held short term bullish bias. Failure to hold above a support line from late 2007 favors additional weakness. Staying below 1.6014 keeps the trend pointed down. An impulse (5 waves) is in its final stages from that level, after which I will expect a countertrend advance. This should unfold within the next week or so (short opportunity probably next week).
Euro / Australian Dollar
I had been expecting a long term 5th wave from 1.5470 to extend. This remains possible but I want to show the monthly just to illustrate that it is just as possible that a multi decade top is in place for the EURAUD at 2.1174 (October 2008 high). The implications here are enormous of course. This is a pair that you may want to keep an eye on. Even if the top is in at 2.1174, there will be a strong advance before the bulk of the decline (as a second wave) so there is no need to jump in to this trade.
Euro / New Zealand Dollar
After failing at channel support (which I showed last week), it is necessary to consider the long term bearish alternate. In the case of the EURNZD, the top in March 2009 completes wave B of a flat that began at the 1992 top. If this count is correct, then wave C is underway and will end below the 1997 low of 1.6100. NZDUSD structure on the daily is quite clear. 5 waves down from the February top are nearing completion. Once complete (the 5 waves) a countertrend rally should bring the pair back to at least 2.3600.
[I]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.
Please send comments about this report to <[email protected]>[/I]