US Dollar Fails at Key Levels; More Weakness Likely

-EURUSD objective now 1.4150-1.4200
-GBPUSD and NZDUSD unclear
-AUDUSD breaks yearly high; towards .7700
-USDJPY potential resistance at 99.75
-USDCAD larger decline underway towards 1.1350
-USDCHF larger decline underway towards 1.0925

Euro / US Dollar[/B]

The push above channel resistance suggests to me that the EURUSD corrective advance from 1.2510 is not yet complete. In fact, recent developments suggest a rally through 1.3742 and possibly as high as 1.4150-1.4200 (61.8% of decline from 1.4723 and 100% extension of 1.2510-1.3742). Staying above 1.2965 keeps this outlook intact and there is short term Fibonacci support at 1.3125. There is one count that treats the current decline as an ending diagonal…I do not see this count as probable given the break of the channel AND the break higher in stocks yesterday (assuming that recent correlations hold). I’ll probably attempt to go long in the next few days against 1.2965.

British Pound / US Dollar[/B]

Cable is confounding right as the pair still has the head and shoulders top ‘look’. Structure is not clear near term. The only statement that I can make with a high degree of certainty is that the rally from 1.35 is a larger 4th wave (corrective) and that it is highly probable that 1.3500 will be broken later this year. Staying above 1.4513 keeps the short term trend pointed higher and there is potential short term support at 1.4680.

Australian Dollar / US Dollar[/B]

The correction from the October low is still underway. The AUDUSD has broken through the 200 day SMA and is at its highest level since early October. Short term Fibonacci support begins at .7323 and extends to .7139. The rally from .6953 is wave v of C and an objective is .7630 (which is where wave v of C would equal wave i of C). This is close to the 50% of the decline from .9822.

New Zealand Dollar / US Dollar[/B]

Like the GBPUSD, the NZDUSD is unclear. The head and shoulders ‘look’ is still there but the decline from .5987 is in 3 waves, which warns of additional upside potential. Remaining above .5534 keeps bulls in control.

US Dollar / Japanese Yen[/B]

The long term trend remains down and I expect a resumption of that trend although there is near term upside potential. There is potential resistance at 99.72 (March 5 and April 17 highs).

US Dollar / Canadian Dollar[/B]

A larger USDCAD decline is underway towards 1.1359 and perhaps even lower. Weakness, which is accelerating, strongly suggests that 5 waves from .9055 are complete at 1.3068. 1.2065 is short term resistance.

US Dollar / Swiss Franc[/B]

The USDCHF decline is also likely to extend. 1.0925 is the 61.8% of the advance from 1.0367 and potential support. Staying below 1.1606 keeps the pair on a path lower. Short term resistance is at 1.1450.

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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