A tight range persists in the EURUSD but the USDCAD is nearing its range high yet again and the NZDUSD is testing trendline support.
[B]Euro / US Dollar[/B]
Until a break above 1.4452 or below 1.4044, there is no directional bias. A rally above the range high opens up the door for an extension to the December 2008 high of 1.4720. Coming under 1.4044 would suggest that an important top is in place and that the longer term bear that began last summer has resumed. Short term resistance is at 1.4320.
[B]British Pound / US Dollar[/B]
If a 4th wave triangle ended at the end of July, then the subsequent rally to 1.7050 was a terminal thrust and a significant top is in place. A drop below 1.5800 is required in order to confirm hat a top is in place however. Staying above there keeps open the possibility that an ending diagonal is unfolding from 1.5800.
[B]Australian Dollar / US Dollar[/B]
As the AUDUSD nears its 2009 high, the bearish short term pattern has been called into question yet remained valid. A drop below .8151 would negate any bullish potential and open up a move to .7700.
[B]New Zealand Dollar / US Dollar[/B]
Coming under .6640 would negate the blow-off top scenario that I have discussed in recent days and also mean that channel support (since March) has been broken. Shorter term trendline support is being put to the test right now. Divergence at multiple degrees of trend also favors bears.
[B]US Dollar / Japanese Yen[/B]
After a false break through channel resistance, the USDJPY is back below both the 55 and 200 day moving averages. The pair has failed at the 38.2% of the decline from 97.81. Only a break below 91.73 would eliminate the larger range and give scope to a test of 87.00 and legitimate breakdown. Risk on shorts can be moved to 95.10.
[B]US Dollar / Canadian Dollar[/B]
The USDCAD is similar to the EURUSD in that until the pair breaks its range, there is no directional bias. However, a 5 wave decline is visible from 1.3068. The decline could be wave A of an A-B-C corrective decline or wave C of a larger flat from the December 2008 high. Either way, bulls are favored until at least 1.1730.
[B]US Dollar / Swiss Franc[/B]
The USDCHF is in the exact same position as the EURUSD. A C wave is either complete or will complete upon slipping beneath the December 2008 low at 1.0367. A rally above channel resistance would strongly suggest a low.
[B]British Pound / Japanese Yen[/B]
Bigger picture, the pair remains in a large range (146.70-163.00) and 150.00 is potential support before the range low. Staying beneath 153.68 keeps the pair headed on a path lower towards the range low of 146.74. Short term divergence with RSI warns of at least a pause in the decline (if not outright reversal), so beware of a turn…
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) and the DFX Trend Index every day after the NY close. He is also the author of Sentiment in the Forex Market. Follow his intraday market commentary at DailyFX Forex Stream. Contact Jamie at <[email protected]>