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AUD/USD Breaks Down and Top Warnings Form in Yen Crosses

By , Sr. Technical Strategist
06 February 2013 14:14 GMT

Daily Technicals (all USD crosses, gold, crude)

Other TA (crosses, COT, etc.)

FOREX Trading and Technical Analysis Observations

Maintain a constructive bias on euro crosses in general, especially the EURAUD. The AUDUSD has broken significant support and a measured objective is 9700.

The EURUSDremains above trendline support. Risk is moved to 13455 as a drop below Tuesday’s low would expose the 20 day average at 13419 and 1/14 high at 13403. Price needs to remain above 13403 in order for the decline from 13711 to be considered a 4th wave. Potential resistance before Friday’s high is 13613/43.

“The long term EURAUD bullish breakout is valid against 12568. The target from the inverse head and shoulders isn’t until above 14000.” Risk is moved up to 12895. Near term support is 13040 and 12990. Now that the AUDUSD has broken down, the EURAUD may really begin to accelerate. The most aggressive AUDUSD target is 9700. This objective is reached by extending the 10148-10598 range from 10148 (10148 needs to break first of course). Potential supports ahead of 10148 are 10287, 10235, and 10192. Shorts were taken last night with risk of 10460. I’ll look to tighten the stop when appropriate.

No change regarding EURCHF – “The EURCHF may be searching for an important low. Price is testing the 50% of the advance from the ‘floor’. I’m bullish as long as price is above the former range high of 12183 (daily closing basis).” Risk has moved up to 12250.

The EURJPY came 20 pips shy of the 2010 high last night (2010 high is 12790) and has come off nearly 200 pips since. ‘Top warnings’, in the form of outside days at more than 2 standard deviations from the 20 day average, flashed yesterday across every Yen cross (I published this to my Twitter feed last night). The USDJPY and AUDJPY are closest to breaking short term supports (9330 and 9595) and therefore the most technically bearish. In my account however, I’ll be trading EURJPY for several reasons. 1.) I’m already heavily involved in AUD shorts (through AUDUSD and EURAUD) and 2.) I’m already heavily long EUR (through EURUSD, EURCHF and EURAUD). Short some EURJPY serves to hedge the EUR exposure. Watch trendlines and the 20 day average for support in the coming days (as long as we are below last night’s high).

EURAUD –Daily

AUDUSD_Breaks_Down_and_Top_Warnings_Form_in_Yen_Crosses_body_euraud.png, AUD/USD Breaks Down and Top Warnings Form in Yen Crosses

Prepared by Jamie Saettele, CMT

AUDUSD –Daily

AUDUSD_Breaks_Down_and_Top_Warnings_Form_in_Yen_Crosses_body_audusd.png, AUD/USD Breaks Down and Top Warnings Form in Yen Crosses

Prepared by Jamie Saettele, CMT

EURJPY –Daily

AUDUSD_Breaks_Down_and_Top_Warnings_Form_in_Yen_Crosses_body_eurjpy.png, AUD/USD Breaks Down and Top Warnings Form in Yen Crosses

Prepared by Jamie Saettele, CMT

--- Written by Jamie Saettele, CMT, Senior Technical Strategist for DailyFX.com

To contact Jamie e-mail jsaettele@dailyfx.com. Follow me on Twitter for real time updates @JamieSaettele

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Jamie is the author of Sentiment in the ForexMarket.

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06 February 2013 14:14 GMT