Currency Crosses: Technical Outlook 03-22
It looks as though the EURGBP 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 before finding a low.
Euro / Canadian Dollar
“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 13900 is potential resistance now.
Euro / Australian Dollar
Not until a move above 15064 would one be able to say that the EURAUD has reversed. Still, one should not completely ignore the warning signs of a pending reversal. Those signs include oversold and divergent daily RSI and what may be a completed diagonal from 15331. Still, the next level of chart support is not until the 1997 low at 14025.
Euro / New Zealand Dollar
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 trendline) and indicate a reversal. The next major downside level is 18181 (2008 low).
Euro / Japanese Yen
I wrote last update to “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.” It is possible that the EURJPY decline is a 3rd wave and that wave 4 is underway now. However, with only 3 waves down to this point and a sizeable bounce from the low, one must entertain a corrective count from the high. Initial resistance is 12263. A move above 12320 would create overlap and cloud the bearish pattern.
British Pound / Japanese Yen
I wrote Friday that “the trend is down and the recent rally is corrective. 13200 should eventually give way. 13680 and 13750 are resistance levels.” Now, the decline appears impulsive as well. 13680-13750 is a resistance zone. A rally into that zone presents an opportunity to short against the high.
Canadian Dollar / Japanese Yen
The drop below 8870 suggests that a top is in place and I 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 + correction may be complete as the drop below 8224 confirms a short term double top. 8484 would be the next level of potential resistance in the event of additional strength. 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. I am looking for the decline from 6500 to extend into 5 waves and confirm a more important top.
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 email@example.com.
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