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Currency Crosses: Technical Outlook 03-19

Currency Crosses: Technical Outlook 03-19

2010-03-19 15:38:00
Jamie Saettele, CMT, Sr. Technical Strategist


It looks as though the EURUSD has completed wave D of a triangle that has been underway since December 2008 (last day of that month).  If wave E is underway, then weakness should extend to former resistance (which is now likely support) at 8850 or 8750.      
“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 14113.  The next significant price level on the downside is not until the 2007 low at 13284.”  Former support at 13775 is potential resistance now.
I wrote last update that “the EURAUD may be completing a diagonal from 15331.  The bounce from 14804 would be wave 4 with wave 5 underway now.  If this count is correct, then the pair would drop to a new low prior to reversing higher.”  We got the low and the risk of a reversal is high.  Initial resistance is 14810.  Short term nimble traders may wish to pick at this from the long side but be extremely careful.  The next level of chart support is not until the 1997 low at 14025.
The EURNZD pair has been basically in a range since mid January and only a move above 19881 would clear the top of the range and indicate a reversal.  The next major downside level is 18181 (2008 low).
I wrote last update that “since the top at 12525, the EURJPY has declined in an impulsive manner and rallied in 3 waves.  Favor the downside against 12525 and target a drop below 12320.  12260 would be initial support on a drop below there, followed by 12140.”  Continue to favor the downside towards 12140.  Price ideally stays below 12340 on its way lower in this 3rd wave but a move back above there would not negate the larger bearish pattern.
British Pound / Japanese Yen
The GBPJPY has tested and slightly exceeded the 38.2% retracement of the decline from 15076.  The level is reinforced by the wide congestion zone that extends to 14360.  I wrote last update that a “drop under 13710 would probably indicate that a top is in place.”  The pair is attempting a break of its short term support line.  To state it simply, the trend is down and the recent rally is corrective.  13200 should eventually give way.  13680 and 13750 are resistance levels.  
Canadian Dollar / Japanese Yen
A drop below 8870 would suggest that a top is in place.  The CADJPY looks awfully heavy at its current juncture.  Favor the downside against 9065.  The next significant support is not until 8690.    
Australian Dollar / Japanese Yen
The AUDJPY is in a similar situation.  A month long correction may be complete although additional strength cannot be ruled out until price breaks below 8224.  8484 would be the next level of potential resistance.  As mentioned for the last week, “regardless of the short term picture, I am bigger picture bearish against 8625.”    
New Zealand Dollar / Japanese Yen
The NZDJPY pattern is the most complex (with respect to the rally from the February low).  At this juncture, the rally would count as a triple 3 complex correction.  Price has dropped below the short term support line, which does give scope to further losses and a reversal.  Cautiously favor the downside against 6500.
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 atwww.fxcmexpo.com.

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