currency crosses

The EURCAD, EURAUD, and EURNZD will likely break through to multi-year (and in some cases decade) highs in the months ahead.  Now is the time to position.

Bigger picture, the Fibonacci zone (of the rally from .6535 to .8192) does not begin until .7558.  Still, decline from .8192 is in just 3 waves so it is possible that an important low is in place at .7699.  Another possibility, which is what I subjectively favor, is that a large complex correction is underway that will end below .7699.  In this case, an X wave is underway now; which may take a number of weeks to complete.   

The EURCHF slipped below 1.5314, negating the bullish bias.  Expect a C wave to complete near 1.49, which is where waves C and A would be equal.    

A long term bull has resumes in the EURCAD.  In the coming months, expectations are for breaks above 1.6331 and 1.6959.  Now is the time to position against 1.5507.  Coming under there would face support from the 61.8% of 1.4711-1.6164 at 1.5250.

The EURAUD exceeded 2.11 last week to trade at its highest level this decade.  The drop from there is viewed as corrective and the bias is bullish against 1.7243 as the EURAUD is expected to continue on to higher levels.

Altering the count slightly, the EURNZD completed a 15 year triangle in July 2007.  Strength since then will result in a break above 2.6171 but likely as a terminal thrust (thrusts from triangles are terminal and are retraced). 

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.

Contact at jsaettele@dailyfx.com

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