daily technicals

The USD and Yen (especially) remain strong.  The Yen looks likely to continue its trend while signals regarding the US dollar are mixed.

The EURUSD failed to break through 1.3785 and now finds itself below 1.3485, which was my bullish line in the sand.  The pair is in the middle of the recent range and only a break below 1.3250 or above 1.3785 is going to provide a clear direction.  Long term momentum is clearly down but I don’t see a safe short entry at this near this level.  Those willing to take on risk can try the short side against 1.3688.  The next long term support is the 2007 low at 1.2865.

I want to show the long term structure once more because the USDJPY may be on the verge of entering its fastest decline in over 13 years!  The long term target for the USDJPY is below the 1995 low of 81.12 (dropping below there would complete wave 5 waves down from the early 1970s).  Coming below 95.72 would confirm that wave iii of 5 is underway to much lower levels.  Remaining below 103 keeps the bearish trend intact.  100.25 is potential resistance.

The rally from 1.6775 is an impulse (5 waves) and the decline from 1.7629 is nearing the 61.8% at 1.7110.  Look for support near there.  A rally through 1.7380 would increase confidence in the bull side. 

Nothing has changed regarding the USDCHF.  “5 waves up from 1.0686 and 3 waves down to former support is bullish for the USDCHF.  The alternate is still bullish, but the next leg up would not occur until a drop below 1.1125 that completes a larger correction from 1.1493.”   

As long as the USDCAD is above the trendline from late September, bulls are in control.  Coming under the line would give scope to further weakness to complete an A-B-C decline from 1.2120.

The drop below .6809 negated the bullish bias and confirms that the advance from .6328 is indeed corrective and in all likelihood will be fully retraced.  It is also possible that a flat or triangle is underway, in which case, price could continue higher from near the current level.  

The NZDUSD is in the same position as the AUDUSD.  The rally from the low is in 3 waves, and therefore corrective.  The larger trend is still down but in the case of a triangle or flat, the resumption of the decline will be delayed.

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.

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