daily technicals

Dollar Fights Back-AUD and NZD Reach Early 2008 Prices

Wednesday, 07 October 2009 14:32:02 GMT  |  Jamie Saettele, Senior Currency Strategist

The AUDUSD and NZDUSD have reached their March and January 2008 lows, just 1 year (for AUDUSD) and 8 months (for NZDUSD) after trading at multi-year lows.  Media coverage on the weak US dollar has increased dramatically in the past several days.  This dynamic tends to occur at the end of a trend.

 

Euro / US Dollar

Was 1.4850 the top?  I don’t know and only time will tell.  However, that level did mark the 100% extension of the 1.2327-1.4723 rally (from 1.2454) as well as the top of a channel.  The media is suddenly aware that the US dollar has declined (it has been doing so since March) and such recognition tends to mark turns rather than continuation.  1.4710 is short term resistance in the EURUSD and there is a short term resistance line that is worth watching as well. 

British Pound / US Dollar

The trend remains down against 1.6130 and price action since the 9/28 low is viewed as a consolidation (perhaps a triangle).  A resistance line is at 1.6105 tomorrow.   

Australian Dollar / US Dollar

Last commentary was on Monday and I wrote than that “bears are favored against the high (.8866).  If that level fails to hold, then focus would shift to .8950 and .9030.  .8950 is a former support level and .9030 is the 78.6% retracement of the decline from the 2008 high.” .8950 has been reached and RSI is divergent with the high.  The uptrend is in its latter (maybe finished?) stages.    

New Zealand Dollar / US Dollar

The NZDUSD has reached what was former support from the January 2008 low at .7374.  Clearly, the advance is overdone as evidenced by RSI divergence (daily) and the fact that the rally is in its Fibonacci 8th consecutive month.  

US Dollar / Japanese Yen

A rally above 90.43 would confirm a double bottom just above 88.00, which would be bullish and expose 92.55.  Until and unless that happens, the trend remains down.

US Dollar / Canadian Dollar

Having dropped to a fresh 2009 low, focus is now on 1.0317, which is the 61.8% extension of 1.3068-1.0782/1.1730.  1.0670 and 1.0700 are short term resistance points.

US Dollar / Swiss Franc

The USDCHF daily wave count warns (and has been warning) of a significant low.  A rally above 1.0457/channel resistance would confirm a low.   

Jamie Saettele publishes Daily Technicals every weekday morning, COT analysis (published Monday mornings), technical analysis of currency crosses on Monday, Wednesday, and Friday (Euro and Yen crosses), and intraday trading strategy as market action dictates.  He is the author of Sentiment in the Forex Market.  Follow his intraday market commentary at DailyFX Forex Stream. 

Contact Jamie at jsaettele@dailyfx.com if you would like to receive his reports via email.

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