Euro Consolidates; 1.4330 Defines the Trend

Euro / US Dollar

I remain bearish against 1.4330 as the short term pattern in the EURUSD strongly suggests that the longer term decline has resumed.”  The drop below the diagonal support line (wave v of C ending diagonal) opens up the door for a move to 1.3750 over the next several days.  In the event that last night’s high fails to hold, resistance is at 1.4210/20.  At this point, it is wait and see for the EURUSD.      

British Pound / US Dollar

Staying below 1.6672 keeps the GBPUSD on a path lower towards 1.6000 and 1.5800.  I am showing the daily chart in order to illustrate how much air is under current price.  As mentioned, the first important support level is 4 bug figures away.  Bigger picture, it is possible that the poke above 1.7000 completed the entire rally from 1.3500.

Australian Dollar / US Dollar

The decline from .8484 is in 5 waves, suggesting with a high probability that the larger trend has turned down.  .8271-.8317 is the area of the former 4th wave, which is usually strong resistance.  Resistance extends to the 61.8% at .8357 in the event that last night’s high fails to hold.  However, the decline from the Asian session high is an impulse (5 waves), which suggests that weakness should resume from the current level.

New Zealand Dollar / US Dollar

I wrote last week that “the rally from .6193 (wave 5) may be unfolding as a diagonal.  If this is the case, then price will poke above .6823 prior to reversing.”  Failing just shy of the mentioned line, the NZDUSD has indeed reversed sharply.  The rally from .6640 reversed at the 50% retracement of the previous decline last night.  Like the AUDUSD, the decline from the Asian session high is an impulse therefore favor weakness with last night’s high remaining intact.

US Dollar / Japanese Yen

I wrote yesterday that “I’d rather sell rallies at this point, given the signs of a reversal in equities.”  This remains the case although the short term pattern is not especially clear.  94.50 is potential resistance and price ideally remains below 95.30 on its way lower.

US Dollar / Canadian Dollar

The USDCAD is breaking higher.  Structure is bullish against 1.0791 and a short term target is 1.1517 (161.8% extension of 1.0631-1.1080 rally).  There is potential short term resistance at 1.1230 (100% extension and former resistance). 

US Dollar / Swiss Franc

The USDCHF pattern is the same as the EURUSD pattern (but as the inverse).  Wave C within the A-B-C corrective decline from 1.2303 may be truncated and therefore complete.  Trading above 1.0939 would confirm the reversal.  Near term, price ideally stays above 1.0670. 

British Pound / Japanese Yen

The GBPJPY rally from near the 100% extension of the decline from 163.15-155.96 has nearly been completely retraced.  Coming under 153.44 would open up the 161.8% extension near 149.  Short term resistance is in the 155.60-156.00 zone. 

Jamie Saettele publishes Daily Technicals every weekday morning (930 am EST), COT analysis (published Monday mornings), technical analysis of currency crosses throughout the week (EUR on Tuesday, JPY on Wednesday) and the DFX Trend Index every day after the NY close.  He is also the author of Sentiment in the Forex Market.  Follow his intraday market commentary at DailyFX Forex Stream.  Contact Jamie at jsaettele@dailyfx.com