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FX Technical Weekly

Friday, 17 April 2009 20:27:04 GMT | Jamie Saettele, Senior Currency Strategist

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-EURUSD risk on short position moved to 1.34
-Staying short NZDUSD
-First USDCHF long target hit
-New AUDUSD and EURJPY trades

EURO / US DOLLAR

Elliott Wave Outlook: Structure on the daily has been clear and I maintain that a 3rd of a 3rd wave is down within the 5 wave decline from 1.60. The negative slope of the EURUSD is increasing (as should happen in 3rd waves). Risk can be moved to 1.3400. A short term Fibonacci extension at 1.27 is a short term bearish target (long term target is much lower).

041709_techw_eur_2

BRITISH POUND / US DOLLAR

Elliott Wave Outlook: It is possible that a flat is complete at 1.5068. Coming under 1.4579 would confirm that a top is in place. Until then, confidence in direction is low.

041709_techw_gbp_2

AUSTRALIAN DOLLAR / US DOLLAR

Elliott Wave Outlook: There is enough evidence to suggest that the entire advance from .60 is complete in the guise of a complex correction (W-X-Y). The 200 day SMA is at .7330 and defends the high at the same level. RSI has dropped from above 70 and broken its own trend.

NEW ZEALAND DOLLAR / US DOLLAR

Elliott Wave Outlook: There are 5 waves down from that .6090, indicating that the long term trend remains down. An expanded flat correction has unfolded from the February 2 low (.4958). Wave c is in 5 waves, RSI is divergent at the high and has rolled over from overbought territory on the daily. Price should remain below .5939.

US DOLLAR / JAPANESE YEN

Elliott Wave Outlook: The 61.8% of 110.71-87.09 at 101 has held as USDJPY resistance. With price trading below a short term parallel support line, it is worth holding a bearish bias against 100.76. The long term trend remains down and I am looking for a resumption of that trend. The downside potential is significant. Still, bears aren’t out of the woods until price distances from the 200 day SMA.

US DOLLAR / CANADIAN DOLLAR

Elliott Wave Outlook: Wave 5 within the advance from .9055 should begin soon. The decline from 1.3068 is in 3 waves (to this point) and has found support at the 4th wave of one less degree (1.2020). Additional weakness should find support at 1.1861 (100% extension) but it is possible that a low is already in place at 1.1976.

US DOLLAR / SWISS FRANC

Elliott Wave Outlook: Like the EURUSD, the USDCHF has resumed its longer term trend towards USD strength. Bulls are in control as long as price is above 1.1300.

EURO / JAPANESE YEN

Elliott Wave Outlook: I wrote last week that “the EURJPY is at risk of forming a top and declining sharply.” The drop below a support line that had held since February suggests that a complex correction from the October low is complete at 137.46. Near term, staying below 131.50 keeps the trend pointed lower.

EURO / BRITISH POUND

Elliott Wave Outlook: I wrote last week that “the drop below .9072 suggests that a larger correction or even impulsive decline is underway from .98. Wave structure is now bearish against .9507.” From a risk control standpoint, it is best to wait for completion of the drop from .9507 and subsequent correction prior to going short against .9507. This process should take at least a few weeks to play out. The decline may accelerate near term but risk is too large here (.9507).

EURO / CANADIAN DOLLAR

Elliott Wave Outlook: The decline from 1.6983 is sharper than I’d like to see for a correction and the second leg of the drop is extended. This suggests that the decline from 1.6983 is not a correction at all but rather an impulse that will end beneath 1.5633.

041709_techw_eurcad_2