Euro Crosses Attempt Bigger Rallies

I wrote last week that “longer term, I expect a reversal of strength that has persisted since 2000.  Within a few years, the EURGBP could drop below the 2000 low of .5680.  Near term, a push above .8669 is expected.  This rally could complete the entire 8 year rally.”  The EURGBP has rallied through .8669 and there appears to be some upside left before a reversal is more probable.  .90 could serve as resistance.   

The EURCHF remains within the upward sloping wedge.  Having pushed above the 61.8% of the decline from 1.6372, the next level of potential resistance is the 78.6% at 1.5904.  This level intersects with the upper end of the wedge on December 15 (next Monday).  

From the 2001 low to the 2007 low, the EURCAD traced out 5 waves up and 3 waves down.  The implications from this pattern are bullish and indicate that price is likely to exceed the 2004 high at 1.6971.  The rally may be ready to accelerate as the pair attempts to distance itself from previous resistance in the 1.63-1.64 zone.

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…eventually.  However, a larger correction in the form of a triangle is also a possibility from here.  In that case, the pair would follow a path similar to the one mapped out on the chart.

Last update, I wrote that “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.”  The immediate bullish outlook is favored as long as price is above 2.3014.  A drop below there would delay the expected rally and support would come in at the Fibonacci zone from 1.2215-1.2288.

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.