fx technical weekly

Euro / US Dollar

 

Jamie: Parallel channel support and the 50 day SMA have held in the EURUSD, which keeps the larger uptrend intact at least for the time being.  Still, momentum diverged during the rallies from 1.3747 and 1.4480, which is one reason I feel that the 5th wave labeling (2 different degrees) is correct.  With bigger picture bearish implications, I must respect this bearish count.  1.4900/20 is serving as resistance.  Coming under 1.4800 would bolster confidence.  Additional resistance would be 1.4940/80.  Above 1.5065 negates the bear term bearish stance and exposes 1.5280.    

British Pound / US Dollar

 

Jamie: The GBPUSD has been in consolidation mode since late May.  Price has traded in a 1300 pip range since then but most of the trading has taken place in roughly the 1.6000-1.6600 zone.  The consolidation could be corrective (continuation of strength) or distributive (reversal of strength).  Strategically, it is best to play the range for now.  Favor the downside with price below 1.6700/50. 

Australian Dollar / US Dollar

 

Jamie: The AUDUSD has held (on a daily closing basis) a support line (red line) drawn off of lows in March, July, September and October along with 5th wave channel support.  Until a break of channel support, there is the possibility (although I do not see it as probable) of a new high.  Coming under .8900 would likely trigger a rapid decline as late longs rush to liquidate.  .8485 would be an objective on a downside break.

New Zealand Dollar / US Dollar

 

Jamie: NZDUSD price pattern is bearish against .7640.  The pair has dropped below a support line drawn off of the September and October lows.  The underside of that line is potential resistance at .7342 today and increasing 15 pips per day.  The decline from .7640 is impulsive and the rally is corrective and possibly complete at .7316.  Additional resistance would be .7360/75, and .7410/45.

US Dollar / Japanese Yen

 

Jamie: The bigger picture pattern is constructive. Either a triangle or complex correction is underway since December 2008.  The next leg should be up towards 101.50 (maybe even above).  One possible scenario is that a leading diagonal unfolded as either larger wave A or 1 from 88 to 92.35.  A larger B or 2nd wave is underway from 92.35.  That correction may be complete at the ‘panic low’ that occurred last Sunday night.    

US Dollar / Canadian Dollar

 

Jamie: The USDCAD rally from 1.0200 is best counted as 3 waves so the decline from 1.0875 could be a 4th wave correction.  The pair has found support just below the area of former 4th waves, which is common.  Trading above 1.0875 exposes the late September peak near 1.1000.        

US Dollar / Swiss Franc

 

Jamie: The USDCHF has broken above its multi month channel resistance.  The USDCHF short term count is similar to the EURUSD short term count in that they both may have completed expanded flats as wave 2 or B corrections.  Favor the upside against the low (1.0030).

Euro / Japanese Yen

 

Jamie: An overriding theme continues to elude me with respect to the Yen crosses.  Some show evidence of topping and reversing (NZDJPY especially) and others show more bullish evidence (at least in my opinion).  If another trend towards risk aversion is underway, then one would expect downside breaks (keep this in mind).  Still, it would be foolish to ignore the triangle pattern in the EURJPY.  Triangle patterns are usually of the continuation variety (bullish in this case).  Until a break, forecasting big picture direction is futile.

British Pound / Japanese Yen

 

Jamie: The GBPJPY decline from 163.15 does reinforce the call for a 5th wave decline to end below 118.79.  What is unclear is whether or not the rally from 139.68 is complete.  One must entertain the idea that the rally is complete because the reversal occurred near the 61.8% retracement/100 day SMA/former congestion.  From a reward/risk standpoint, holding a bearish position against 153.30 is worth a shot since the objective is much lower.  Understand that risk is inherent in any trade.     

Euro / British Pound

 

Jamie: It has been several weeks since I proposed that a 4th wave was underway from above .9400.  However, a 5th wave rally has failed to take hold and the EURGBP continues to consolidate at the lower end of its range.  The probability of a bullish outcome decreases with each day that the EURGBP fails to rally.  The alternate count, in which the rally from .8400 is part of a triangle or flat, is gaining traction.  Better opportunities exist.