While the rest of the majors have contented themselves in their anti-dollar advances, the USDJPY looks as if it may be turning in the greenbacks favor. While this may have to more to do with risk trends than anything else, we do not have to concern ourselves with the particulars. What is notable for us is the proximity of notable Fibonacci levels and the pressure those technicals will have in building up a potential breakout. Resistance is clearly defined by an easily read 38.2% retracement of the 12/27 to 1/23 bear wave. Support, on the other hand, is at the 50% Fib level of the shorter lived 1/23 to 2/14 swing high. I am still flat on this pair, but I will be watching intently to see if a break can offer greater direction for the USDJPY.
[B]The Fibonacci Personality:[/B] As the great master of Pisa once noted all of life is composed of Fibonacci. I use these golden ratios to understand the movements of the market and profit from their predictions. Let me know what you think of my analysis on the Fibonacci Forum. • Euro Strength Persists, But Profit Potential Fading • Pound Breakout Restrained By Fib Confluence • Congestion Still Dominates The Yen, Though A Break May Be At Hand • Swiss Franc Inches Closer To Generational High Against US Dollar • Trend Channel Falls, Canadian Dollar May Be Looking At Reversal • The Magnetism Of New Multi-Decade Highs Draws The Aussie Dollar Higher • New Zealand Dollar’s Steady Ascent Overwhelms 22-Year High
[U][B]
EUR/USD[/B][/U]
[B]Strategy: Bullish against 1.4435, Targeting 1.5000[/B]
My target has been met for the euro, but we are have yet to see a confirmed direction from EURUSD. I have moved my target for my bullish inclinations up by another cent to 1.5000, as this will be an attractive milestone for euro traders to reach; but such an advance may not be reached over the coming week. Currently a wedge is defining price action and building pressure for an eventual breakout at the same time. I would not enter long as these prices, but a cheaper price near the bottom our wedge would present a higher probability, relatively quick trade. I am not waiting for a break of 1.5000 (to flush the market’s interest in this psychological level) or a break move below 1.4435 (which would change my medium-term market bias).
[U][B]GBP/USD[/B][/U]
[B]Strategy: Bullish against 1.9335, Targeting 2.0030[/B]
The downtrend that had developed in the GBPUSD since the sharp reversal on November 9th continues to fade into the background. Price action is now confined to a range between 1.9400 and 1.9750, but these confines are not likely to hold the volatile GBPUSD for very long. I retain my bullish bias as 1.94 has held and a new subsequent swing lows from the initial January test have not produced a deeper test. Despite this outlook though, I will not be aggressively bullish until 1.98 falls to pound strength as there is some Fib confluence in the 1.9725/1.9800 area. Hedging a good, long-term entry may be a good idea until a break is confirmed.
[U][B]USD/JPY[/B][/U][B][/B]
[B]Strategy: Flat, waiting for either a break above the medium-term 38.2% fib at 108.60 or a move below 104.95[/B]
While the rest of the majors have contented themselves in their anti-dollar advances, the USDJPY looks as if it may be turning in the greenbacks favor. While this may have to more to do with risk trends than anything else, we do not have to concern ourselves with the particulars. What is notable for us is the proximity of notable Fibonacci levels and the pressure those technicals will have in building up a potential breakout. Resistance is clearly defined by an easily read 38.2% retracement of the 12/27 to 1/23 bear wave. Support, on the other hand, is at the 50% Fib level of the shorter lived 1/23 to 2/14 swing high. I am still flat on this pair, but I will be watching intently to see if a break can offer greater direction for the USDJPY.
[U][B]USD/CHF[/B][/U]
[B]Strategy: Flat, waiting for a confirmed, break above the short-term 38.2% fib at 1.1060 or clearing record lows with momentum[/B]
Though USDCHF has broken the bounds of its tight range from last week, direction was quickly lost and the pair fell right back into a stifling congestion zone. The choppy price action from this pair may be the work of a market trying to gradually build a floor for price action; but it is too early to qualify such speculation. Without direction, there is limited profit potential and high risk in being whipped out; so I will wait for 1.1060 (the 50% retracement of the 12/21 to 2/4 swing low) to fall before taking a short-term upside outlook. The more sound probabilities are behind continuation of the long-term trend to the downside; but qualifying momentum in this direction may prove more difficult.
[U][B]USD/CAD[/B][/U]
[B]Strategy: Flat, waiting for confirmed move below 0.9875 or the bull trend to push back above 1.01[/B]
USDCAD has pulled back to the stop point we had put into place last week after the pair dropped below the support of its medium-term, rising trend channel. Notable resistance has stepped in quickly to temporary plug bearish momentum in the form of a 38.2% retracement of the 11/7 to 1/22 bull wave; but after such a clear break of a long-term technical like our rising trend channel, it would be risky to gamble on a rebound. I will stay on the sidelines until a bearish break is confirmed or the bull trend is revived.
[U][B]AUD/USD[/B][/U]
[B]Strategy: Bullish against 0.9050, Targeting 0.9405[/B]
The Australian dollar’s climb is relentless. Considering today’s market conditions and the majors’ struggle to find direction, the AUDUSD’s advance is surprising. Composing myself from this surprise, it is now time to move up my stop to secure profits on this steady advance. A 0.9050 floor should prove reliable as it falls below a notable fib, pivot point and the pair’s short-term rising trend. Our next target remains a test of the multi-decade 0.9405 high (which seems a more probable target considering the record highs seen recently in NZDUSD). Should this level fall in the coming week, I will have to turn to extensions to calculate the next target on AUDUSD follow through.
[U][B]NZD/USD[/B][/U]
[B]Strategy: Bullish against 0.7850, Targeting 0.8275[/B]
In an unusual twist of market fate, the New Zealand dollar’s advance this past week has been more momentous than its Australian counterpart’s. NZDUSD has surpassed its previously set 22-year high on Monday and punctuated the milestone by closing above the 7/24 intraday high. However, despite the technical significance of these new highs, there has been very limited follow through with the pair holding to the same choppy conditions that ushered it to a multi-decade high. The lack of follow through suggests hesitation; and I have therefore moved up my stop and drawn up my next bullish target: the 161.8% fib extension from the 1/15 to 1/22 downswing.
