Euro Fails at 61.8% of Previous Decline

-EURUSD and USDCHF patterns extremely USD bullish
-AUDUSD poke above .8128 negates bearish pattern
-USDCAD vulnerable to a new low

Euro / US Dollar

The EURUSD pattern suggests that the pair is about to plunge. 5 waves down from 1.4340 make up wave 1 or A of a 5 or 3 wave bear sequence. The rally from 1.3804 is in 3 waves, which confirms that the larger trend is down. The minimum objective is below 1.3804 although there is much greater bearish potential.

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. Staying below 1.6667 keeps the bearish bias on track.

Australian Dollar / US Dollar

The AUDUSD rally through .8128 negates the short term bearish bias and leaves the decline from .8269 as just a 3 wave affair. Unless a complex correction is underway from .8269, the AUDUSD will break to a new high soon. Short term support is at .80.

New Zealand Dollar / US Dollar

The NZDUSD has not broken above its equivalent level, which is .6422. Staying below there keeps bears in control but confidence is low given the AUDUSD bullish implications.

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 wave v of C is expected to end below 1.0782.

US Dollar / Swiss Franc

The USDCHF pattern is the exact same as the EURUSD (but as the inverse) 5 waves up from 1.0589 suggest that an important low is in place. Favor the upside against there.

[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.

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