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Currency Crosses: Technical Outlook

Currency Crosses: Technical Outlook

2011-05-25 22:00:00
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 Friday)

TREND

S3

S2

S1

PL

PH

R1

R2

R3

EURJPY

DN

109.93

111.67

113.76

115.32

115.67

117.58

119.32

121.41

GBPJPY

DN

128.15

129.27

130.95

131.77

132.34

133.74

134.85

136.54

CADJPY

DN

80.46

81.56

82.79

83.83

83.95

85.12

86.22

87.45

AUDJPY

UP

82.97

83.95

85.58

86.23

86.89

88.20

89.18

90.81

EURGBP

DN

0.8491

0.8584

0.8658

0.8742

0.8761

0.8826

0.8919

0.8993

EURCAD

DN

1.3402

1.3518

1.3653

1.3758

1.3778

1.3903

1.4019

1.4154

EURAUD

DN

1.3044

1.3161

1.3222

1.3311

1.3368

1.3400

1.3518

1.3579

EURNZD

DN

1.7217

1.7499

1.7644

1.7858

1.7995

1.8072

1.8354

1.8499

Euro / British Pound

Weekly Bars

05-25-11crosses_body_EURGBP.png, Currency Crosses: Technical Outlook

Prepared by Jamie Saettele, CMT

The EURGBP has fallen beneath its parallel channel (not shown) and 8672 therefore negating potential for a 5th wave rally to a new high (above 9042). There may be support from the top side of the former long term resistance line but rallies should now be sold against 8850 as per the break of 8672. A bearish objective is the 100% extension of the 9042-8677 decline at 8475. Former support at 8675 is resistance.

Euro / Canadian Dollar

240 MinuteBars

05-25-11crosses_body_eurcad.png, Currency Crosses: Technical Outlook

Prepared by Jamie Saettele, CMT

13600/50 has been strong support since the beginning of April and as long as price is above there I am looking slightly higher towards 14000. This level is defined by former resistance, former support, and the 50% retracement of the decline from 14339. A rally to there would also trace out the right shoulder of a potential head and shoulders top and offer an opportunity to get short.

Euro / Australian Dollar

DailyBars

05-25-11crosses_body_euraud.png, Currency Crosses: Technical Outlook

Prepared by Jamie Saettele, CMT

The EURAUD continues to trade sideways. Additional strength would test 13480 (former support) and resistance extends to the 61.8% retracement at 13660. The favored count treats weakness from 14343 as a series of 1st and 2nd waves. Strength into the mentioned levels should give way to a 3rd wave collapse in the coming weeks.

Euro / Japanese Yen

Daily Bars

05-25-11crosses_body_eurjpy.png, Currency Crosses: Technical Outlook

Prepared by Jamie Saettele, CMT

The EURJPY decline from 12332 is clearly in 3 waves (to this point) and the reversal near parallel channel support increases confidence in a bullish bias. Monday’s low has held and the high was broken, which is constructive and favors strength the rest of this week. 11850 is potential resistance.

British Pound / Japanese Yen

Daily Bars

05-25-11crosses_body_gbpjpy.png, Currency Crosses: Technical Outlook

Prepared by Jamie Saettele, CMT

“The decline in the GBPJPY from 14001 unfolded in 5 waves (impulsive) therefore expectations are for a corrective rally before additional weakness below 13027. I still expect at least a test of 13400 and probably a move into the 50%-61.8% Fibonacci zone of 13514-13629 before weakness resumes.” A rally has unfolded and a breakout indicated today by the disparity index (breakout defined as specific level above/below specific average – in this case the average is 20 days). Look higher towards 13630 (61.8% retracement). 13290-13310 is support.

Canadian Dollar / Japanese Yen

DailyBars

05-25-11crosses_body_cadjpy.png, Currency Crosses: Technical Outlook

Prepared by Jamie Saettele, CMT

I wrote last Friday that “the decline from 8951 is clearly in 3 waves and the 2 down legs are equal. Near term structure isn’t clear (could be an x wave triangle or flat) but the corrective characteristics of the decline keep me looking higher towards 8715. Like the other Yen crosses, it’s possible that a large triangle or flat is underway. From a trading perspective, the pattern favors range trading between here and 8700-8800.” The range has tightened and there is little else to say. Having held the low (8228), I am cautiously looking higher.

Australian Dollar / Japanese Yen

Daily Bars

05-25-11crosses_body_audjpy.png, Currency Crosses: Technical Outlook

Prepared by Jamie Saettele, CMT

The AUDJPY is in the same situation as the CADJPY. Price has held the low made early in the month and the decline from 9002 is clearly in 3 waves (to this point of course). There are many possibilities from a wave structure standpoint and most point higher from here, including a triangle, flat, or outright continuation of the bull move.

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.

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