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Currency Crosses: Technical Outlook 03-16

Currency Crosses: Technical Outlook 03-16

2010-03-16 13:53:00
Jamie Saettele, CMT, Sr. Technical Strategist

  Euro/British Pound


 The EURGBP should continue higher and trade above 9153 in order to complete 5 waves up from 8656.  That rally could complete 3 waves up from 8599 and wave D of a triangle that has been underway since December 2008 (last day of that month).  9200 is potential resistance as is 9244.      

The EURCAD remains well within its bearish channel.  Until a break of a pivot high, it is dangerous (if not foolish) to go long.  The bullish pivot is 14155.  The next significant price level on the downside is not until the 2007 low at 13284.
Near term, the EURAUD may be completing a diagonal from 15331.  The bounce from 14804 would be wave 4 with wave 5 in its early stages.  If this count is correct, then the pair would drop to a new low.  Only a move above 15208 would indicate a reversal.
After dropping to a 2 year low, the EURNZD popped nearly 500 pips.  Still, the pair has been basically in a range since mid January and only a move above 20077 would clear the top of the range.  19380-19425 may provide short term support.  The next major downside level is 18181 (2008 low).
I wrote last week that “although far from clear, the decline from 13853 can be counted as a 5 wave decline (first wave is a truncation).  This would portend a move back to at least 12528 and possibly 12745.”  The EURJPY rallied to and reversed at 12525.  A complex correction can be counted from the low, so the correction may be complete.  Also, reversing from the former 4th wave extreme (circled) is common.  

British Pound / Japanese Yen
I wrote last week to “expect resistance from trendline/channel resistance either late this week or early next week.  The pair could exceed 13743 in order to complete a flat or remain below and form a triangle.”  The GBPJPY has reversed from parallel channel resistance (much like the EURUSD) after completing what appears to be a flat.  Favor the downside against Friday’s high.

Canadian Dollar / Japanese Yen
The rally from 8235 is in nearly 2 equal legs and the CADJPY has broken below short term channel support.  However, one more high in order to complete a diagonal from 8691 cannot be ruled out.  A drop below 8750 would suggest that a top is in place.  

Australian Dollar / Japanese Yen
The AUDJPY is in the same position as the CADJPY.  The pair may see additional strength before finding a more meaningful top.  In the event of additional strength, levels to watch for a reversal are 8389 and 8484.  A break of 8124 would suggest that a top is in place.  Regardless of short term fluctuations, I am bigger picture bearish against 8625. 

New Zealand Dollar / Japanese Yen
It remains possible that a top is in place for the NZDUSD.  A drop below 6244 would confirm as much.  However, additional strength in a larger correction cannot be ruled out.  6541 would be resistance.
Jamie Saettele publishes Daily Technicals every weekday morning, COT analysis (published Friday evenings), technical analysis of currency crosses on Monday, Wednesday, and Friday (Euro and Yen crosses), and intraday trading strategy as market action dictates at the DailyFX Forum.  He is the author of Sentiment in the Forex Market.  Follow his intraday market commentary and trades at DailyFX Forex Stream.   Send requests to receive his reports via email to jsaettele@dailyfx.com.  Traders can meet me at the FXCM Expo in Las Vegas on May 3rd and 4th.  You can register to attend at www.fxcmexpo.com.


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