Currency Crosses: Technical Outlook 07-14
The larger EURGBP trend is down towards 7600-7700 (October 2008 low and Fibonacci extension). The rally from 8066 is best counted as a 3 wave advance – potentially wave 4 within the decline from 9153. Look for intraday weakness to signal that wave 5 is underway.
Euro / Canadian Dollar
A larger 4th wave in the EURCAD is probably underway as either a triangle or flat. I favor the triangle at this point because the rally nearly reached the former 4th wave extreme (13480). A potential for a triangle offers range opportunities over the next several weeks. 12790 is support.
Euro / Australian Dollar
The EURAUD pattern is similar to that of the EURCAD. A corrective pattern of sorts may be underway from the May low as either a flat or triangle. Near term, the decline from 15020 is an impulse (5 waves) and a bounce should lead to additional weakness below 14330. 14565 and 14730 are resistance levels.
Euro / Japanese Yen
The EURJPY rally from 10730 consists of overlapping waves and is therefore probably corrective. What’s more, the advance channels in a corrective manner and price has stalled ahead of a June high of 11345. Coming beneath channel support would signal the potential for additional weakness. Until then, the EURJPY could chop higher.
British Pound / Japanese Yen
I continue to favor the triangle interpretation. “The GBPJPY sideways trading over the last month is probably a B wave triangle.” That triangle may be complete. Short term support is at 13380 and the triangle interpretation is valid as long as price is above 13240.
Canadian Dollar / Japanese Yen
The CADJPY rally has stalled just ahead of the 61.8% retracement of the decline from 9007. Additional strength would test 8670-8720 (61.8% retracement and the 200 day SMA), which should prove a difficult level for bulls to overcome. The multi week objective remains 7850 (100% extension and 2009 low).
Australian Dollar / Japanese Yen
A break below the May low is expected eventually, with weakness likely extending to 6600 (100% extension). The 3 wave rally from 7190 leaves the AUDJPY vulnerable (although one could make the case that both the decline from 8090 and advance from 7265 are impulses). Near term, I expect weakness down to 7600.
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 firstname.lastname@example.org.
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