April 27th, 2007
Euro Crosses to Fall Before Larger Uptrend?
EURAUD - The EURAUD has reversed off of channel-lows to break a short-term trendline. The short-term move may come under pressure through the coming days, however, with the 38.2 percent Fibonacci of the 1.7043-1.6195 down-move at 1.6519 thus far successfully repelling further advances. The medium term outlook remains essentially unchanged, but a break of 1.6400 eyes further falls to previous swing-lows at 1.6312. A hold of this level opens up a move towards channel-highs closer to 1.6800, but coming below 1.6200 negates the medium-term bullish scenario.
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) The EURCAD has successfully broken through a medium-term upward trendline at 1.5300 to move near three-month lows at 1.5172. It has this far been unable to come below, with hourly charts showing a very shallow trendline lending support at 1.5200. A bullish divergence on the hourly MACD likewise bolsters the case for a retest of the downward sloping trendline in the 1.5280-1.5300 range, with a hold below 1.5331 to allow for a resumption of the medium-term downtrend.
EURNZD - The EURNZD has effectively tested and posted a short-term bounce off of a significant 61.8% Fibonacci (1.6326-2.1187), with a clear bullish crossover on the daily MACD bolstering the case for further medium-term gains. Through the very short term, however, waning bullish momentum on hourly charts opens the door for a retest of support at a minor rising trendline of 1.8300. A successful hold leaves scope for a move towards the 4/12 high at 1.8554 and the 38.2% retracement of 1.9497-1.8128 at 1.8648.