The US dollar continues to gain but short term patterns indicate that the end of the advance is near.
The trend is considered down as long as price is below 1.4228. For the first time in a while though, the very short term count has come into focus. The entire decline from 1.4908 counts nicely as an ending diagonal as each wave subdivides into a 3. Look for support at 1.3846 tonight.
Bigger picture, we continue to favor the downside. Price is now below the line that has held the entire advance from 95.72. On intraday charts, the USDJPY looks vulnerable to a push through 109.06 but the potential for a larger decline exists as long as price is below 110.65.
The trend is considered down as long as price is below 1.7974. As low as oscillator readings are on the daily, there is little on the intraday charts that suggest a major turn from current price. Even a push through 1.7705 could complete a flat correction and would not be enough to suggest that the decline is over. Of note is that the pair is now in the middle of a significant congestion and support area from late 2005/early 2006.
The USDCHF is nearing a Fibonacci confluence (1.1453-1.1590). The December 2007 high at 1.1594 defends this area as well. Ideally, resistance is strong at and possibly ahead of these levels. The short term count shown above shows wave 5 nearing completion as a diagonal. Look for resistance near 1.1430/50.
Keep focused on the big picture. “The advance from .9055 may be nearing an end. For one, both legs of the advance are 3 wave structures and separated by a triangle. What we are left with is a complex corrective advance. As long as price is below 1.0927, there is the chance for a major top to form.”
The extended decline leaves the drop from near .88 as a series of 3 wave movements. This indicates that a 5th wave diagonal has been underway and is near completion. Look for support near .7850-.7900.
The extended decline in the NZDUSD leaves the pair in the same position as the AUDUSD. Look for support ahead of .64.
[B]Jamie Saettele writes [I]Forex Technicals: The Day Ahead[/I], Monday-Thursday (published 6-7 pm EST), [I]Daily Technicals [/I] every weekday morning (9-10 am EST), COT analysis (published Monday mornings), and analysis of currency crosses throughout the week. He is also the author of Sentiment in the Forex Market.[/B]
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[B]Contact him at <[email protected]>[/B]