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Currency Crosses: Technical Outlook

Currency Crosses: Technical Outlook

2011-05-06 23:01:00
Jamie Saettele, CMT, Sr. Technical Strategist
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Long Term Trends and Pivot Points (monthly data) (updated on first of the month)

TREND

S3

S2

S1

PL

PH

R1

R2

R3

EURJPY

UP

109.77

113.12

116.62

119.90

120.05

123.47

126.82

130.32

GBPJPY

UP

125.32

129.15

132.36

135.87

136.49

139.39

143.22

146.43

CADJPY

UP

78.85

81.71

83.78

86.25

87.05

88.72

91.58

93.65

AUDJPY

UP

82.28

84.04

86.49

87.91

88.60

90.70

92.47

94.91

EURGBP

UP

0.8510

0.8612

0.8733

0.8825

0.8845

0.8956

0.9058

0.9179

EURCAD

UP

1.3067

1.3328

1.3650

1.3881

1.3941

1.4232

1.4493

1.4815

EURAUD

DN

1.2968

1.3227

1.3359

1.3554

1.3681

1.3749

1.4008

1.4139

EURNZD

UP

1.8310

1.8327

0.0018

1.7246

1.7612

1.7943

1.8292

1.8327

Medium Term Trends and Pivot Points (weekly data) (updated every week)

TREND

S3

S2

S1

PL

PH

R1

R2

R3

EURJPY

DN

107.66

111.43

113.48

116.39

118.12

119.30

123.07

125.12

GBPJPY

DN

124.69

127.79

129.89

132.50

133.50

135.10

138.21

140.31

CADJPY

DN

77.84

80.06

81.64

83.54

84.18

85.44

87.66

89.24

AUDJPY

DN

78.83

81.57

83.82

86.31

86.81

88.81

91.55

93.80

EURGBP

DN

0.8361

0.8555

0.8653

0.8799

0.8896

0.8945

0.9139

0.9237

EURCAD

DN

1.3247

1.3558

1.3718

1.3953

1.4103

1.4188

1.4499

1.4659

EURAUD

DN

1.2701

1.3048

1.3234

1.3500

1.3662

1.3767

1.4114

1.4300

EURNZD

DN

1.7119

1.7619

1.7882

1.8264

1.8502

1.8646

1.9147

1.9410

Euro / British Pound

Daily Bars

05-06-11crosses_body_eurgbp.png, Currency Crosses: Technical Outlook

Prepared by Jamie Saettele, CMT

The Euro absolutely plunged to end the week…against everything. With respect to the EURGBP, the uptrend and 9160 objective remain intact. In fact, a detailed look at this week’s decline reveals a sharp 3 wave drop. The 2 declining legs would be equal at 8719, a level that is reinforced by a former pivot low. Look for a low near there early next week.

Euro / Canadian Dollar

Daily Bars

05-06-11crosses_body_eurcad.png, Currency Crosses: Technical Outlook

Prepared by Jamie Saettele, CMT

As long as price is above 13658, I favor the upside in the EURCAD. Price has trended higher in a channel since the February low and the break above the long term trendline warrants a bullish stance on pullbacks. It’s certainly possible that the EURCAD sees several weeks or more of sideways consolidation before an attempt on 14346. Near term resistance is 13970 and 14100.

Euro / Australian Dollar

DailyBars

05-06-11crosses_body_euraud.png, Currency Crosses: Technical Outlook

Prepared by Jamie Saettele, CMT

I mentioned Wednesday that “there is an alternate count in which a move above 13874 would complete a small 2nd wave but we’ll deal that if we need to.” Now we need to because the EURAUD reversed violently after exceeding 13878. The channel is key. A daily close below the channel would suggest that a 3rd wave is indeed underway towards 12926. Staying within the channel keeps the larger corrective pattern (in which price likely finds a low near 13300 before rallying back towards 14343) valid.

Euro / Japanese Yen

Daily Bars

05-06-11crosses_body_eurjpy.png, Currency Crosses: Technical Outlook

Prepared by Jamie Saettele, CMT

I wrote Wednesday that “the EURJPY is likely to work lower over the next week towards the 4/18 low of 11647. There is a cluster of support near 11500, including the 100% extension of the drop from 12332 at 11498 and the 50% retracement of the entire rally from 10701 at 11517.” The EURJPY is well on its way to testing channel support and the 100% extension at 11498. Expect a test of these levels early next week before the market finds a more sustainable bid.

British Pound / Japanese Yen

Daily Bars

05-06-11crosses_body_gbpjpy.png, Currency Crosses: Technical Outlook

Prepared by Jamie Saettele, CMT

Is the GBPJPY searching for a low? Today’s inside day is viewed as constructive but price has yet to reach the support area defined by the 61.8% retracement at 12946 and the 100% extension at 13000. These levels are reinforced by channel support next week as well. Strength from the current level targets 13400. Price closed at the 200 day SMA today (not shown).

Canadian Dollar / Japanese Yen

DailyBars

05-06-11crosses_body_cadjpy.png, Currency Crosses: Technical Outlook

Prepared by Jamie Saettele, CMT

The CADJPY is in the exact same situation as the GBPJPY. Price has yet to reach its measured support of 8200/21 but price held yesterday’s low and exceeded the prior day’s high-action that is indicative of a bottom. The 200 day SMA also crosses today’s low. 8535 is near term resistance.

Australian Dollar / Japanese Yen

480 MinuteBars

05-06-11crosses_body_audjpy.png, Currency Crosses: Technical Outlook

Prepared by Jamie Saettele, CMT

The AUDJPY dropped to test former resistance near 8450 before rallying nearly 300 pips. Yesterday’s decline was completely retraced and additional strength from here gives scope to a test of the 5/3 low and 20 day average at 8750/70. I’m not completely sold on the idea that the Yen crosses have found permanent lows. The 30 year bond did trace out long legged doji today but the objective above 126 (channel and measurement) looms large (intersects on Tuesday and Wednesday).

Jamie Saettele publishes Daily Technicals every weekday morning, COT analysis (published Monday), technical analysis of currency crosseson Wednesday and Friday (Euro and Yen crosses), and intraday trading strategy as market action dictates at the DailyFX Forex Stream. A graduate of Bucknell University, he holds the Chartered Market Technician (CMT) designation from the Market Technician Association. He is the author of Sentiment in the Forex Market. Send requests to receive his reports via email to jsaettele@dailyfx.com.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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