daily technicals

Major Trend Changes On the Horizon

Wednesday, 04 October 2006 12:10:09 GMT  |  Jamie Saettele, Technical Currency Analyst

• Euro In Downward Sloping Channel
• Japanese Yen Back To Square One
• British Pound Plummets
• Swiss Franc Nears 200 day SMA
• Canadian Dollar Close To Resistance
• Australian Dollar Continues To Slip
• New Zealand Dollar Rally Stalls





EURUSD – The 61.8% of 1.2827-1.2637 at 1.2754 has held as resistance and the pair has dropped below 1.2700.   A downward sloping channel has formed from the 8/21 high at 1.2938.  Price has also dipped below the 22 day SMA again – which tilts the scale towards bears.  1.2630 is the trigger for a breakout to the downside.  Initial resistance is yesterday’s high at 1.2765.






USDJPY – The USDJPY has rallied to the 78.6% of 118.39-117.35 at 118.17 to make a short term double top this morning with last night’s Tokyo session high.  A break above the 10/2 high at 118.39 exposes the pivot highs from April and February at 118.87 and 119.38.  A supporting trendline drawn through 113.95 and 115.55 is at the 117.00 figure today.  A break below there could trigger heavier selling to the 9/22 low at 116.07.





GBPUSD – Cable’s rally failed just shy of the 61.8% of 1.9072-1.8632 at 1.8903.  However, it still takes a dip below 1.8762, a pivot high from Sunday night, in order to confidently suggest that the trend is again down and that prices are to test the 9/29 low at 1.8632.  Like the EURUSD, the pair has slipped back below the 22 day SMA.  Short term momentum is down as evidenced by 240 minute RSI below 50 (midpoint).  Resistance is yesterday’s high at 1.8897.





USDCHF – The USDCHF has rallied off of the 1.2400 figure and is headed back to the upper end of the ascending triangle (bullish) near 1.2600.  22 day momentum remains positive and RSI is steadily increasing (near 60 now).  The 200 day SMA is at 1.2587 and a break above would indicate a major change in trend.  Support remains the 10/2 low at 1.2404.     





USDCAD – We have maintained a bullish stance against 1.1028 due to the 5 wave rally from 1.1028 to 1.1294 and the subsequent 3 wave decline from 1.1294 to 1.1085.  However, a head and shoulders pattern on the daily clouds the picture.  The neckline is near 1.1061 – a break below would complete the pattern.  Due to the presence of the h & s pattern, it is best for bulls to limit risk to the 9/28 low at 1.1085.  Price is nearing resistance from the 9/20 high at 1.1294 and 240 minute RSI is overbought – suggesting that near term gains could be limited.  The 200 day SMA is at 1.1324 and a break above bolsters the bullish argument.     





AUDUSD – AUDUSD continues to fall towards support at the 7/19 low at .7403 and the 78.6% of .7270-.7721 at .7368.  The break of the .7481 range low and the move below the 200 day SMA favors a longer term bearish bias.  .7481 remains initial resistance but the former range high at .7573 must hold in order to keep the bearish bias intact.




NZDUSD – The rally from .6486 has stalled at .6617.  Scope remains for additional gains towards the 61.8% of .6721-.6486 at .6631 or the 78.6% at .6670.  A rally to there sets up a head and shoulders reversal pattern.  Only a push above.6721 negates the bearish bias.  A drop below .6486 opens the door for bears to test the trendline drawn through .5927 and .6342.  That line is at .6475 and a daily close below exposes .6342.   

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