Currency Crosses: Technical Outlook 06-11

Euro / British Pound

The EURGBP has broken lower and bearish objectives remain at 7600-7700 and 7900. Daily RSI is not oversold yet…and the bulk of a trending move often occurs after an ‘oversold/overbought’ reading is reached. Former support is now resistance near 8430.

Euro / Canadian Dollar

I expect a low to form. The decline from 16100 has stretched just beyond the 161.8% extension of the previous down leg. I wrote Wednesday that “12450 is the 2000 low and a test of that level may be required before the EURCAD finds a low.” The EURCAD is putting that level to the test now. Understand that I am not advocating long positions. Rather, I am suggesting that a low could form based on several technical considerations. There would not be a trade to the long side until short term charts present a setup.

Euro / Australian Dollar

If a secondary low is to form, then it needs to form now as the decline form 15469 has retraced more than 78.6% of the previous advance. I’m showing the long term chart to demonstrate the importance of 14000.

Euro / Japanese Yen

Since the March high at 12800, the EURJPY pattern is the same as that of the DJIA. The Monday low was probably a B wave low. Expectations are for strength in a C wave to exceed 11420. This week’s reversal candle supports a larger reversal as well.

British Pound / Japanese Yen

I expect additional strength in the GBPJPY. Objectives are from 13865 to 14190 (61.8%-78.6% retracement of decline from 14603…the former 4th wave extreme is 14065). 13220 is short term support.

Canadian Dollar / Japanese Yen

A short term resistance line is being put to the test. Given my changed outlook for risk over the next several weeks, a break of the line seems likely. 8750 is short term support after serving as resistance since the end of May.

Australian Dollar / Japanese Yen

The AUDJPY decline from 8813 is left as a 3 wave affair and is probably wave A of a flat or complex correction. B waves of flats tend to retrace a significant amount of their A counterparts. The initial target area is 8100/50.

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 at the DailyFX Forum.  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.