currency crosses

Currency Crosses: Technical Outlook

The Euro / commodity crosses and Yen crosses are constructive.  Both could be working towards upside breaks.

Euro / British Pound

No change from Friday – “The EURGBP held the 50% retracement of wave 3 and today’s (Friday) inside day is further evidence of a short term sentiment shift.  Favor the upside and target a new high (above .9416).  In the event that .8910 fails to hold, the wave i of 3 high at .8843 is potential support.  Coming below .8703 would signal that the larger trend is probably down.”

Euro / Swiss Franc

“There is little to say about the EURCHF technically and there will not be until the pair breaks from the triangle.  The fight between bulls and bears wages on in a triangle that has been underway since October.  Triangles are typically continuation patterns, so a downside break seems more probable.  Still, forecasting is an exercise in probabilities rather than certainties so jump the gun at your own risk.”  The triangle count shown above is bearish but a bullish outcome is possible too (a would become A and wave B would be ending now).  Consider 1.5250 and 1.5070 the breakout levels.  The lower triangle line is being pressured now so maybe, just maybe we’ll see a break.

Euro / Canadian Dollar

Price action from the October low shows a 5 wave rally, followed by a 3 wave decline in the form of an expanded flat.  1.5640 should hold but if it does not, then look for support at 1.5600 and then 1.5510.  A rally above 1.6010 shifts focus to 1.6335.

Euro / Australian Dollar

The EURAUD is testing a resistance line (which is reinforced by former support from the 10/1 low). A break above this level exposes 1.6710, 1.6850, and finally 1.7145.

Euro / New Zealand Dollar

The EURNZD blasted through the multi month resistance line last week and closed the week just pips from its high. The pair is stalling near its 50 day SMA but did break above for several days last week (for the first time since March). Favor buying dips. 2.0030, 2.0140 and 2.0280 are all supports.

Euro / Japanese Yen

Longer term direction is unclear in the Yen crosses. Some show evidence of topping and reversing (NZDJPY especially) and others could break either way. If the larger risk aversion trend has truly started, then one would expect downside breaks. The EURJPY bullish count is presented above but a bearish outcome does remain possible as long as price is below 136.00 (the alternate treats the decline as a series of 1st and 2nd waves). On the daily, consolidation since the spring could be a bullish triangle that ended at 129.00. 133.90/134.45 is potential short term support.

British Pound / Japanese Yen

Near term, the GBPJPY is in the same situation as the EURJPY. That is, price action since the September low looks bullish (the bearish alternate…same as EURJPY…is valid against 151.80). Short term support is 149.00/70.

Swiss Franc / Japanese Yen

The CHFJPY pattern from its September low is that same as that of the EURJPY and GBPJPY. The rally looks impulsive and the decline corrective so an upside break (from the multi-month consolidation) seems more probable. Supports are at 88.95, 88.55, and 88.20.

Canadian Dollar / Japanese Yen

I am unsure of the action since early June. Either a head and shoulders top or triangle is unfolding. The 200 day SMA has held up and maintains a positive slope, which favors the bullish triangle interpretation. 84.30/80 is potential short term support.

Australian Dollar / Japanese Yen

Same deal here with the AUDJPY. Price action since the September low simply looks bullish (impulsive advances and corrective declines). 81.80 and 82.25 are short term support areas.

New Zealand Dollar / Japanese Yen

The NZDJPY is the only Yen pair that offers compelling reversal evidence. The rally from the February low takes the form of a wedge (and more precisely the form of a an A-B-C advance with wave C as an ending diagonal). The pair broke below its support line last week but found support from the 100 day SMA. If a top is in place, then price ideally stays below 67.50.

 

Jamie Saettele publishes Daily Technicals every weekday morning, COT analysis (published Friday evenings), technical analysis of currency crosses on Monday, Wednesday, and Friday (Euro and Yen crosses), and intraday trading strategy as market action dictates.  He is the author of Sentiment in the Forex Market.  Follow his intraday market commentary and trades at DailyFX Forex Stream.  Send requests to receive his reports via email to jsaettele@dailyfx.com.
 

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