Currency Crosses: Technical Outlook 07-16
I still maintain that the larger EURGBP trend is down towards 7600-7700 (October 2008 low and Fibonacci extension). However, the break above 8430 suggests that the pair is headed to the next resistance level of 8600 (former support) before heading lower.
Euro / Canadian Dollar
The break above the July 2 high (13434) shifts focus to the 100% extension of the initial bull leg, which is at 12975. 14100 is former support and now potential resistance (as is the 200 day SMA at 14260). Short term support is from 13360 to 13470.
Euro / Australian Dollar
A corrective pattern of sorts may be underway from the May low as either a flat or triangle. Strength above 15020 would set sights on 15390 (100% extension of 13958-15021). Initial support is 14750.
Euro / Japanese Yen
The EURJPY rally from 10730 consists of overlapping waves and is therefore probably corrective. I wrote Wednesday that “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.” The pair has come beneath its channel and focus is on 11090 and then 10915. 11225 is short term resistance.
British Pound / Japanese Yen
The rally to 13600 appears to have been a false triangle break. Given the EURJPY position, it is reasonable to expect weakness in the GBPJPY below 13040 in what may be a B or X wave (semantics). 13370 is short term resistance.
Canadian Dollar / Japanese Yen
The multi week CADJPY downside objective remains 7850 (100% extension and 2009 low). 8275 and 8310 are short term resistance levels. Above there would warn of a move back to 8450.
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). The high on Wednesday could serve as the top of a right shoulder within a head and shoulders continuation pattern. 7590 is short term resistance and price should stay below 7680 if the longer term decline is underway.
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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