A look at the 10 year Euro/US Dollar chart gives us true perspective on the currency pair’s moves. Weekly RSI on the EUR/USD is now at its most bearish extreme since the inception of the Euro, and support at 2006 lows is the only worthwhile price floor above 1.2145. Given such extreme readings on weekly oscillators and a recent flip in EUR/USD sentiment , a short-term recovery seems the more likely outcome for the Euro/US Dollar pair.
The Euro/US Dollar’s descent has been nothing short of incredible, and only a look at a 10 year chart gives us true perspective on the currency pair’s moves. Weekly RSI on the EUR/USD is now at its most bearish extreme since the inception of the Euro, and support at 2006 lows is the only worthwhile price floor above 1.2145. Given such extreme readings on weekly oscillators and a recent flip in EUR/USD sentiment, a short-term recovery seems the more likely outcome for the Euro/US Dollar pair. Yet dramatic declines suggest that more losses are in store on a more medium term basis for the fast-weakening Euro.
Japanese Yen strength came to an abrupt stop at the bottom of the USD/JPY’s multi-year trending channel, and the pair has since recovered impressively through recent trade. The sharp recovery suggests that a further short-term rebound is likely, with next major resistance to come in near the 38.2 percent Fibonacci retracement of 110.70-90.90 at 98.45. Said level likewise coincides with the spike low seen just several weeks ago, and a break above could tell us that further USD/JPY corrections are in store. Yet clearly dramatic declines suggest that the more medium-term USD/JPY downtrend remains intact. Discuss the USD/JPY in our forex forum.
The British Pound’s astounding losses have sent the GBP/USD to the 78.6 percent Fibonacci retracement of the 1.3700-2.1100 advance, and the pair’s sharp short-term recovery suggests further gains are in store. On a much shorter-term chart, we see that the GBP/USD has been thus far unwilling to break the top of its rising hourly trend channel at 1.5756, but a break higher would likely lead the pair to previous resistance of 1.5880. Watch for shorter-term GBP/USD buy/sell indications on our forex trading signals page.
A long-term study of the US Dollar/Swiss Franc shows that the USD/CHF trades at or near the top of its 5-year trend channel—suggesting that recently-impressive USD/CHF strength may soon come to an end. Extremely overbought weekly oscillators likewise suggests that the USD/CHF may be near a medium-term top, and explosive gains leave the currency pair susceptible to a short-term correction. Only a sustained break above recent spike-highs of 1.1746 would negate our bearish bias.
Incredible US Dollar strength and Canadian Dollar weakness has led the USD/CAD through all kinds of major resistance levels. The most plausible level for a USD/CAD reversal came at its 2004 lows and 2005 highs near 1.2700, but a clear break leaves the currency pair far from most historically significant price levels. The next major level of resistance comes in at the confluence of major congestion and the 61.8 percent Fibonacci retracement of 1.6190-0.9060 at 1.3450. A short-term retracement seems increasingly likely given a weekly RSI in astoundingly overbought territory, but potential for a further 500 points in rallies hardly makes a short position attractive through the near-term.
The Australian Dollar/US Dollar pair’s key support level at 6721 has come and gone, and the AUD/USD now faces the potential for another 400 point decline to the next historically significant price floor at 0.5866. The level coincides with the 78.6 percent retracement of the move from 0.4779 and congestion levels from 2001 and 2003. An extremely oversold weekly RSI suggests that a short-term correction is likely, but risk-reward arguably does not support a long stance from these levels.
The New Zealand Dollar/US Dollar pair currently stands at key support of the 61.8 percent Fibonacci retracement of its 8-year advance—a potential turning point for the NZD/USD. A break of the 61.8 percent Fibonacci retracement is largely considered the point at which the previous wave is officially over, and a break lower would point to further NZD/USD weakness. We can’t responsibly advocate a long stance following such extreme losses, but a hold of 0.5560 would suggest that the longer-term uptrend remains intact.