Euro Crosses Mostly Bullish

There is no change to my call for an eventual drop below .5680 in wave (C) of a flat that began in 1995 (valid as long as price is below .9019).  The rally from .5680 is viewed as wave (B) of the large flat.  If you look closely, you’ll see that wave C of (B) is in 5 waves (this latest bought of strength is wave 5).  There is no sign of a top at this point, but the spike in the weekly range as of late suggests that a top is likely to form soon (next few weeks).

The EURCHF rally from the October low at 1.4296 is nearing the point where it would consist of 2 equal legs; which is at 1.5616.  This level, along with the 10/14 and 10/7 highs at 1.5567 and 1.5621, should provide strong resistance.   

A long term EURCAD bull is underway.  In the coming months, expectations are for breaks above 1.6331 and 1.6959 (a multi-year target is above 2.0564).  1.5364-1.5668 is a potential support area and the bias is bullish as long as price is above 1.4818.

The decline from 2.1174 to 1.8487 was in 3 waves, which is corrective and indicates that the larger trend is still up.  A break above 2.1174 is expected.  There is potential support at 1.97 (top of a recent congestion zone).

Another reason to favor strength in the EURAUD over the longer term is the pattern in the EURNZD.  The EURNZD completed a 15 year triangle in July 2007 and a rally to an all-time high is expected.  A 3rd of a 3rd wave is considered underway as long as price is above 2.1024.  The EURNZD rally may accelerate in the days and weeks ahead.

Jamie Saettele writes Forex Technicals: The Day Ahead, Monday-Thursday (published at 6 pm EST), Daily Technicals every weekday morning (9 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.