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Euro / dollar resistance should be strong in the 1.28-1.30 zone.  It is possible that a rally to there completes a triangle that began at the end of October.  The next move would be lower, below 1.2330.

One can make both a bullish and bearish argument for the euro / dollar going forward.  From the bearish perspective, the euro / dollar could still drop below 1.2330 in a 5th wave terminal thrust from a triangle, which is in its final stages.  The triangle labeling is what I am showing this morning.  In the case of the triangle, wave e of the advance should end this week.  Resistance begins at 1.28 and extends as high as 1.30.  From the bullish perspective, the rallies from 1.2330 could be a series of 1st and 2nd waves.  While not pretty, the count is valid and most big rallies begin after formation of a large base. 

Staying bearish the USDJPY has proved a wise decision although the decline over the last month has been choppy.  As long as price remains below 96 (below the resistance line from early October), bearish potential is significant (below 80).   

The rally from 1.4554 is probably wave 4 of (3) (within a 5 wave decline from 2.1160).  Resistance does not begin until 1.60 and there is potential for a move back to 1.67 (38.2% Fibonacci and October 30 high).  1.4554 should remain intact if a larger rally (even if just corrective) has started.

Higher highs and higher lows since the March low favors bulls longer term.  Near term, the decline from the top side of the channel is impulsive and the rally from 1.1828 is corrective.  Expect weakness below 1.1828 in the next several weeks.

The rally from just below 1.15 is in 5 waves and could be a truncated 5th wave.  If so, then a correction back to at least 1.15 and possibly lower is underway now.  The drop from 1.2993 to 1.2120 is in 5 waves, which is bearish.  Price should remain below 1.2993.

There remains potential for a large recovery back to the mid .70s given the 5 wave drop from the top (waves a and b of an a-b-c correction would be close to complete).  Bulls may attempt to ‘pick’ this bottom given that the AUDUSD has held above the October low.

There is quintuple divergence with RSI on the daily NZDUSD chart, which warns of a reversal.  Last Friday’s inside day reinforces the potential reversal to the upside.  Staying above .5186 keeps the short term trend bullish. 

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.