currency crosses

-EURGBP resistance begins at .92
-ERUCHF completing decline from December top?
-EURCAD bullish above 1.5908

There are 5 waves down from .9807, so the EURGBP should remain supported for at least a few weeks.  Near term, the advance from .8835 is probably wave a of an a-b-c correction.  Expect support for wave b at .8982.  The next resistance level is the 38.2% of the decline from .9807, at .9194.

I wrote last week that “the EURCHF is approaching initial Fibonacci resistance from the former 4th wave / 38.2% of 1.5886-1.4752 at 1.5150/75.  It is worth taking a shot at the short side near there.”  The high was at 1.5148 and the pair is putting to test the December low now.  The drop below 1.4752 may be wave c of an a-b-c decline from 1.5886.  If so, then an important bottom should form before 1.4296 and the EURCHF will eventually exceed 1.5886.    

The long term trend for the EURCAD remains up.  To review the long term picture…”from the 2001 low to the 2007 low, the EURCAD traced out 5 waves up and 3 waves down.  Having already exceeded 1.6971, it is possible that a complex declining pattern of sorts is underway from 2.0564 (as shown with alternate labels).  But, the preferred bullish count is intact as long as price is above 1.4711.  Also, the pattern since the 1995 top has the look of an inverse head and shoulders continuation pattern (neckline broken last year).”  The short term pattern suggests that an important low is in place at 1.5747.  A bullish bias is warranted against there. 

A triangle is unfolding in the EURAUD.  Triangles are continuation patterns, so the break from the pattern should be higher.  Following completion of the D wave, the EURAUD is expected to drop in wave E in order to complete the pattern. 

The decline from 2.4858 is corrective but it is not clear whether or not the EURNZD trend has turned back up.  Completion of 5 waves up from 2.2479 would be the evidence required to suggest that the trend has turned back up.  The alternate count treats the drop from 2.4858 as a flat that will end below 1.2479.  Price action over the next several days should shed light on which count is correct.

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.

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