currency crosses

Euro Crosses Breaking From Corrective Patterns

Monday, 10 September 2007 19:03:08 GMT  |  Jamie Saettele, Technical Currency Strategist

EURJPY
EURCHF
EURGBP

 

Commentary – With all of the 3 wave movements since the 8/27 high at 159.67, it is possible that a triangle is unfolding.  If a triangle is unfolding, then it would likely form for the rest of the week and give way to a terminal thrust above 159.67 and possibly test the 61.8% of 168.94-149.25 at 161.42 before a larger degree bear wave brings price under 149.25.  Another possibility is that a flat is unfolding from 159.67.  In this case, price would test the 50%-61.8% of 149.25-159.67 at 154.46/153.23 before testing the 160.00 area.  In summary, expect consolidation (possible at lower levels) prior to a rally that leads to a top and reversal closer to 160.00.     

Strategy – Flat

Commentary – The EURCHF reversed from the 61.8% of 1.6686-1.6175 at 1.6491.  The 9/4 and 9/5 high at 1.6498 represents the high of either a b wave or 2nd wave within a bearish cycle that began at 1.6686.  Look for a test and break of the trendline drawn off of the May 2006, March 2007, and August 2007 lows.  The next bearish targets are 1.5986 and 1.5670 (Fibo extensions).   

Strategy – Bearish now, against 1.6498, targets 1.5986 and 1.5670 

Commentary – The EURGBP has been stuck in a correction since mid-March and it looks like the correction will continue for at least a few more weeks as the rally from .6679 is not impulsive.  The choppy rally gives scope to a drop below .6679 before a long standing bottom forms.  Reversal points are at .6662 and .6606 (61.8% and 78.6% of .6535-.6867).  Still, there is little doubt that the pair is headed much higher in coming months (as the rally is clearly impulsive and the decline corrective).   

Strategy – Bullish on breaks above .6867

 

Written by Jamie Saettele, Technical Currency Strategist of DailyFX.com

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