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Don’t Chase Dollar Weakness Here; Fade It

By , Sr. Technical Strategist
12 April 2012 13:12 GMT

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Afternoon Technicals (all charts)

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Morning Notes:

EURUSD – The rally has extended in time but not much in price. Price has spiked slightly above the former 4th wave extreme (13163) and tested the underside of former trendline support as well (see 2nd chart). A turn lower is expected.

Dont_Chase_Dollar_Weakness_Here_Sell_It_body_eurusd.png, Don't Chase Dollar Weakness Here; Fade It

Prepared by Jamie Saettele, CMT

Dont_Chase_Dollar_Weakness_Here_Sell_It_body_eurusd_1.png, Don't Chase Dollar Weakness Here; Fade It

Prepared by Jamie Saettele, CMT

GBPUSD – The rally from the low has extended but treating strength as corrective is appropriate given the 5 wave decline from 16062. Currently testing the 61.8% retracement of the decline price should turn lower now if the larger trend did indeed reverse last week (don’t forget that a WEEKLY key reversal formed last week).

Dont_Chase_Dollar_Weakness_Here_Sell_It_body_gbpusd.png, Don't Chase Dollar Weakness Here; Fade It

Prepared by Jamie Saettele, CMT

AUDUSD – The April high at 10464 is the line in the sand for AUDUSD bears. Exceeding that level would shift focus to 10510 and 10595 (former supports). As long as price is below there, the trend is considered down and focus remains on the year to date low at 10145. Resistance is bolstered at the current level by the underside of former trendline support, channel resistance, 20 day average, and 200 day average.

Dont_Chase_Dollar_Weakness_Here_Sell_It_body_audusd.png, Don't Chase Dollar Weakness Here; Fade It

Prepared by Jamie Saettele, CMT

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Jamie is the author of Sentiment in the Forex Market.

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12 April 2012 13:12 GMT