A little less than three weeks ago, a sharp reversal in EURUSD marked the end of the dollar’s strongest advance in months. However, recent activity has left the market with few technical boundaries and a major psychological milestone acting as a magnate to traders.
[B]The Fibonacci Personality: [/B]As the great master of Pisa once noted all of life is composed of Fibonacci. We use these golden ratios to understand the movements of the market and profit from their predictions. Let us know what you think of our analysis on the Fibonacci Forum • Euro Sees Little Fib Resistance Between Spot And A New Record High • Congestion Intensifies Influence Of Pound Fibs • Major Fibs Build Pressures Behind An Eventual USDJPY Breakout • Fibs And Techs Offer USDCHF Trading Opportunities • Fibs Provide Little Technical Restraint To Canadian Chop • Aussie Dollar Bulls Jump In At Retracement Levels • Fibs Keep Dominate Trend Intact, But Are Record Highs Within Reach?
[B]EUR/USD[/B]
[B]Strategy: Bullish against 1.5275, Targeting 1.6000[/B]
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[B]GBP/USD[/B]
[B]Strategy: Bearish against 2.0000, Targeting 1.9400[/B]
Though there has been considerable volatility from GBPUSD over the past six months, the pair has been severely lacking for direction. However, this highly active congestion range has produced a number of notable technical and fib levels that have lead to minor breakouts. Looking at the current pair’s recent consolidation, the pound looks as if may be building up for another small breakout - and a noteworthy fib retracement may supply the technical boundaries. The fib retracement levels from the bullish swing between January 22nd and May 14th have stood as both resistance and support in the past; and they are once again stepping in as a buffer to both the up and downside. The 50% fib of the aforementioned retracement marks a ceiling at 1.9870 while the 61.8% level coincides with a past pivot support around 1.9745. While there has been a lack of long-term direction from GBPUSD, it is clear that there is still a disorganized bearish trend channel. As such, we remain bearish against 2.0000 (just above the 38.2% retracement of the same fib) with a target set at the range low around 1.94.
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[B]USD/CHF[/B]
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[B]Strategy: Bullish against 1.0175, Targeting 1.0600[/B]
Following in the footsteps of USDJPY, the Swiss franc-denominated major has fallen into a choppy, rising trend channel that is interspersed with restrictive ranges. This past week, one of the pair’s tight ranges fell. With bearish momentum building from 1.0540, dollar bears were able to push through the 38.2% retracement of the December 25th to March 17th downswing at 1.0400. However, the momentum would quickly give out after the psychological level was broken thanks to a confluence of technicals around 1.0225. This area is fortified not only by the 38.2% fib of the February 13th to March 17th extension, but also by an often-tested pivot level, rising trendline and 50-day simple moving average. With the build up in technicals below, we will hold a bullish bias against 1.0175 and keep 1.0175 as a preliminary floor.
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[B]USD/CAD[/B]
[B]Strategy: Flat, waiting for confirmed move below 0.9700 or the bull trend to retake 1.0000[/B]
The Canadian dollar consistently ignores the sanctity of major technical levels. In the past few weeks, major Fibonacci levels (among many other brands of technicals) have fallen to the pair’s long-running congestion. While the USDCAD sits in a very wide range between 1.0350 and 0.9700, there have been far too many fibs that have fallen with little more than a mere bounce for us to hold any confidence in the mess of retracement levels in the area. Nonetheless, the retracement pulled from the February 28th to April 1st advance is presenting us with temporary resistance at the 61.8% level (holding around 0.9950). Beyond that, parity may once again hold back price action; but we will remain flat on this pair until a range extreme is either tested or broken.
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AUD/USD[/B]
[B]Strategy: Bullish against 0.9300, Targeting 1.0000[/B]
While many of the other majors have stalled in their anti-dollar advances, AUDUSD continues to push ahead. Just this past week, the Australian currency was able to extend its multi-decade highs to 0.9650 before congestion slowed the pair once again. Nevertheless, the dominate trend is still clearly to the upside. A few fib extensions can be drawn from major pivot levels; but they are not yet near enough to threaten nearby resistance. Therefore, we will keep our bullish bias for an eventual test of parity. In conjunction with this aggressive target, our standing stop level will remain relatively wide below 0.9300. This will ensure a break of the rising trendline from January and the range low seen in that area during April and May. And, while a 50% fib retracement does lie in the same area, we do not yet know if the recent 0.9650 high is a major swing level to pull a retracement from.
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NZD/USD[/B]
[B]Strategy: Bullish against 0.7500, Targeting 0.8200[/B]
NZDUSD was one of the major trending pairs through 2007. However, since the turn of the year, the pair’s advance has slowed and eventually turned to significant retracements. Since putting in a double touch at multi-decade highs just above 0.82, the pair had marked a large pullback to test the resiliency of the primary bull trend. When a rising trendline and 50% fib of the September 10th to February 27th advance around 0.7500 held though, the bulls were put back in charge. Considering the changing of the guard, we are keeping with the trend with an objective that sees a retest of 0.82 and beyond. This will be set against support read below the aforementioned trendline and 50% fib seen around 0.75.
