-EURUSD channel support fails to hold
-AUDUSD bearish below .8130
-NZDUSD bearish below .6422
-USDJPY in latter stages of triangle
Euro / US Dollar
The drop below channel support strongly suggests that an important top is in place at 1.4340. The underside of the channel line near 1.4000 is potential resistance going forward as is the 61.8% of the decline from 1.4340 at 1.4135.
British Pound / US Dollar
The GBPUSD has found support from daily lows (end of May) and a line extended from the 4/28 and 5/18 lows. The structure of the decline from 1.6667 is not clear but I have been expecting a significant reversal as the rally from 1.3500 is viewed as wave 4 within the 5 wave decline from the 2007 high. Traders that are short may wish to take off some size given the structural support at the current level.
Australian Dollar / US Dollar
I wrote Thursday that “a flat correction could lead to a spike above .8096 before resumption of the bear. If that happens, then look to go short against the high.” The AUDUSD spiked to .8128 and reversed Friday morning. Bears are favored against .8128.
New Zealand Dollar / US Dollar
I wrote Thursday that “the decline from the top (.66) is an impulse. Expect a corrective advance back to .6400/50 before the resumption of the bear.” The NZDUSD advanced to .6422 Friday and reversed. Staying below there keeps bears firmly in control.
US Dollar / Japanese Yen
The triangle continues to play out. Wave d of the triangle is either complete or in its latter stages. A decline in wave e could lead to a sharp decline as low as 95 before the terminal thrust in wave C (that will eventually end above 101.50).
US Dollar / Canadian Dollar
A rally above 1.1475 would be strong evidence that a significant low is in place. Until then, the USDCAD is vulnerable as the pair remains below a resistance line extended from the 4/23 and 5/18 highs.
US Dollar / Swiss Franc
The USDCHF rally from 1.0589 is unfolding as an impulse. Near term, small 4th and 5th waves would complete 5 waves up from the low and set the stage for a pullback. There is short term support at 1.0830.
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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]