The EURUSD gained for the first day since 9/25. Evidence suggests that this is the beginning of a larger USD decline.
The path that I outlined last night is proving correct so far; “the decline from 1.4871 is an impulse (5 waves) and indicates that a short term low likely forms soon. The ensuing advance should prove corrective. When the advance gets underway, expect strength until at least 1.3911. This is the 4th wave of one less degree.” There is no change here. Additional strength could reach the mid 1.41 level (former resistance and Fibonacci at 1.4138/70).
I wrote yesterday that “100 is the next level that will be put to the test. Former support just shy of 103 (102.81 to be exact) is potential resistance as is the breakout level of 103.50.” The USDJPY came right into the mentioned resistance zone and price was turned back. Price should remain below 103.28 going forward.
The GBPUSD decline from 1.8675 is now in 5 waves and price broke below the September low to confirm the longer term bear. An advance, although corrective, should begin soon. I am expecting the advance to reach at least the 1.7843-79 area.
The USDCHF exceeded 1.1422. The advance is in 5 waves (as is the EURUSD decline from 1.4871) so a 3 wave corrective decline is expected to begin soon. Initial support is at 1.1215 and the Fibonacci zone begins at 1.1178.
The advance from 1.03 is in 5 waves so we should see a corrective decline begin soon in the USDCAD. Support begins at 1.0830, although a deeper decline is likely.
Price has reached the .70 figure but there is no evidence that the decline is over. If a larger correction unfolds, then look for resistance in the 7416-.7517 area going forward. This is former congestion and a Fibonacci level. Be aware that COT positioning indicates potential for a bottom to form soon though. The next bearish objective is near .65.
The drop below .6435 confirms that wave 5 (within the 5 wave drop from .8219) is underway (possibly near completion). With 5 waves down (although no evidence that wave 5 is complete), there is the possibility of a significant bottom forming soon.
Jamie Saettele writes Forex Technicals: The Day Ahead, Monday-Thursday (published 6-7 pm EST), Daily Technicals every weekday morning (9-10 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 him at jsaettele@dailyfx.com
Jamie Saettele writes Forex Technicals: The Day Ahead, Monday-Thursday (published 6-7 pm EST), Daily Technicals every weekday morning (9-10 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 him at jsaettele@dailyfx.com