Index Strat Risk Target EUR/USD [B]Short [/B] [B] 1.3400 [/B] [B]Below 1.2330 [/B] USD/JPY [B]Short[/B] [B] 100.80[/B] [B]TBD[/B] GBP/USD [B]Flat[/B]
[B]
Euro / US Dollar[/B]
Staying bearish has paid and should continue to pay in the weeks ahead. Structure on the daily has been clear and I maintain that a 3rd of a 3rd wave is down within the 5 wave decline from 1.60. Shorter term structure is coming into focus as the slope of the EURUSD decreases (as should happen in 3rd waves). There is no reason to alter the bearish outlook. Risk can be moved to 1.3396. There may be support near 1.30 from the 2/23 high (former resistance) but the trend is down and rallies should be sold. A short term Fibonacci extension at 1.27 is a short term bearish target (long term target is much lower).
[B]
British Pound / US Dollar[/B]
Remaining above 1.4579 maintains a GBPUSD bullish structure but the EURUSD bearish count warns of USD strength across the board (save for the Yen). With this in mind, confidence is low in the GBPUSD direction. It is possible that a flat is complete at 1.5068. Divergence with MACD at recent highs along with the indicator about to drop beneath the zero line favors bears.
[B]
Australian Dollar / US Dollar[/B]
I wrote yesterday that “a daily close beneath the support line that has held since March would signal that a top is most likely in place.” Price closed at the line yesterday but is below the level currently. The 200 day SMA is at .7330 and defends the high at the same level. RSI has dropped from above 70 and broken its own trend. There is enough evidence to suggest that the entire advance from .60 is complete in the guise of a complex correction (W-X-Y).
[B]
New Zealand Dollar / US Dollar[/B]
There are 5 waves down from that .6090, indicating that the long term trend remains down. An expanded flat correction has unfolded from the February 2 low (.4958). Wave c is in 5 waves, RSI is divergent at the high and has rolled over from overbought territory on the daily. MACD slope is negative but the indicator remains elevated on a relative basis, signaling that bearish potential is significant. Price ideally remains below .5939.
[B]
US Dollar / Japanese Yen[/B]
The 61.8% of 110.71-87.09 at 101 has held as USDJPY resistance. The next level of potential resistance is a resistance line drawn off of the July 2007 and August 2008 highs. That line is at 103.55 this week and decreases about 20 pips per week. However, with price trading below a parallel support line AND COT data warning of a sentiment extreme, it is worth holding a bearish bias against 100.76. The long term trend remains down and I am looking for a resumption of that trend. The downside potential is significant. Trading below 98.13 would enable bears to move risk to 99.78.
[B]
US Dollar / Canadian Dollar[/B]
I am presenting a slightly relabeled count on the USDCAD. The implications are bullish as this count anticipates wave 5 within the advance from .9055. The decline from 1.3068 is in 3 waves (to this point) and has found support at the 4th wave of one less degree (1.2020). Additional weakness should find support at 1.1861 (100% extension) but it is also possible that a low is already in place at 1.197
[B]
US Dollar / Swiss Franc[/B]
Like the EURUSD, the USDCHF has most likely resumed its longer term trend towards USD strength. This is my working assumption as long as price is above 1.1300. The advance is accelerating, this reinforcing my bullish view.
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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