bio2

Patterns across the majors suggest that the US dollar will decline to finish the week.

This is the best count at the current juncture.  The up, down sequence from 1.3258 consists of 2 three wave movements which are probably waves A and B of a flat.  Wave C is underway now and likely ends near 1.40.

Remaining below 103 keeps the bearish trend intact.  The alternate gives scope to a push above 103.05 and a test of the 61.8% at 104.15.    

This is the exact same chart from yesterday (with updated prices of course).  “The rally from 1.6775 is an impulse (5 waves) and the decline from 1.7629 is nearing the 61.8% at 1.7110.  Look for support near there.  A rally through 1.7380 would increase confidence in the bull side.”  Cable reversed from just above the 61.8%.  While it is possible that the GBPUSD drops below 1.7133, the pair does have the right ‘look’ for a bottom.  

Nothing has changed regarding the USDCHF.  “5 waves up from 1.0686 and 3 waves down to former support is bullish for the USDCHF.  The alternate is still bullish, but the next leg up would not occur until a drop below 1.1125 that completes a larger correction from 1.1493.” As mentioned this morning, this may be good time to try the short side given the failure below 1.15.   

As long as the USDCAD is above the trendline from late September, bulls are in control.  Coming under the line would give scope to further weakness to complete an A-B-C decline from 1.2120.  I subjectively favor the larger decline scenario since patterns in the other pairs are USD bearish.

The AUDUSD is similar to the EURUSD in that the recovery off of the low and the decline from the recover high are both corrective (3 waves).  In such cases, a flat or triangle is unfolding.  In the case of a flat, the AUDUSD will exceed .7237.

The NZDUSD is in the exact same position as the AUDUSD.  The rally from the low is in 3 waves, and therefore corrective.  The decline from the recovery high is also corrective.  Expect a push through .6345 in order to complete the larger advance.

Jamie Saettele writes Forex Technicals: The Day Ahead, Monday-Thursday (published 6-7 pm EST), Daily Technicals  every weekday morning (9-10 am EST), COT analysis (published Monday mornings), and analysis of currency crosses throughout the week.  He is also the author of Sentiment in the Forex Market.

Contact him at jsaettele@dailyfx.com

• free demo account
• forex courses
• open an account
• forex stream
• free webinars