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EURGBP Rifles Through 20 day Average-Focus is on 8420

EURGBP Rifles Through 20 day Average-Focus is on 8420

2012-01-12 18:25:00
Jamie Saettele, CMT, Sr. Technical Strategist
Share:

Euro / British Pound

Daily Bars

EURGBP_Rifles_Through_20_day_Average-Focus_is_on_8420_body_eurgbp.png, EURGBP Rifles Through 20 day Average-Focus is on 8420

Prepared by Jamie Saettele, CMT

I wrote Tuesday that “the EURGBP carved out a key reversal yesterday so respect the potential for a 4th wave pullback into Elliott channel resistance. The general resistance area is 8327-8422 and the eventual intersection with the channel should indicate the next short opportunity.” Price has rocketed off of the bottom and rifled through the 20 day average today. Focus is on the channel which is at 8420 today (also the 12/29 high) and about 8413 tomorrow. While a 4th wave top is expected in the 8420 vicinity, refrain from blindly entering shorts at that level as risk is sizeable (rather, wait for a sign of a top such as an inside day or intraday key reversal). Shorter term resistance comes in at 8270 and support at 8325/45.

Euro / Australian Dollar

240 Minute Bars

EURGBP_Rifles_Through_20_day_Average-Focus_is_on_8420_body_euraud.png, EURGBP Rifles Through 20 day Average-Focus is on 8420

Prepared by Jamie Saettele, CMT

The EURAUD has taken out yesterday’s low and high and already satisfied the range requirements for a daily key reversal. Favor additional strength towards channel resistance levels and recent highs at 12508 and the 1/3 low at 12568. Given the deep oversold condition, 12620 may not be out of the question (pivot on 1/2 and 1/4). Short term support is 12360-12405. The larger trend must be considered down as long as price is below the first day of the month high at 12695 so rallies into mentioned resistance would present short opportunities.

Euro / Canadian Dollar

240 MinuteBars

EURGBP_Rifles_Through_20_day_Average-Focus_is_on_8420_body_eurcad.png, EURGBP Rifles Through 20 day Average-Focus is on 8420

Prepared by Jamie Saettele, CMT

The deeply oversold level (daily RSI) on the EURCAD suggests lower prices in the weeks and months ahead but strength in the days ahead. Interim resistance is 13100 but the 1/9 high at 13140 and 20 day average at 13230 (20 day avg. decreases about 20 pips per day) define resistance in the days ahead. Exceeding this zone would shift focus to the January high at 13232. Near term supports are 13050 and 13020.

Euro / Japanese Yen

240 Minute Bars

EURGBP_Rifles_Through_20_day_Average-Focus_is_on_8420_body_eurjpy.png, EURGBP Rifles Through 20 day Average-Focus is on 8420

Prepared by Jamie Saettele, CMT

The EURJPY has held its key reversal (discussed on Tuesday) from Monday and traded to a fresh high for the week. Focus over the next few days is 9885-9935 (watch the 20 day average-currently 10010 and decreases 15 pips per day) and only a move above 10030 would suggest that a more important bottom is in place. 9820 is short term support.

British Pound / Japanese Yen

Daily Bars

EURGBP_Rifles_Through_20_day_Average-Focus_is_on_8420_body_gbpjpy.png, EURGBP Rifles Through 20 day Average-Focus is on 8420

Prepared by Jamie Saettele, CMT

“A head and shoulders pattern (continuation…bearish) has been confirmed with the break below neckline support.” The September low at 11682 is of interest but weakness from here does not ‘fit’ with current position in other Yen pairs. As such, respect the potential for strength into 11900 over the next few days.

Australian Dollar / Japanese Yen

Daily Bars

EURGBP_Rifles_Through_20_day_Average-Focus_is_on_8420_body_audjpy.png, EURGBP Rifles Through 20 day Average-Focus is on 8420

Prepared by Jamie Saettele, CMT

AUDJPY focus remains higher towards the December high at 8053, the 11/7 high at 8146 and 100% extension of the rally from the November low at 8269. 7900 and 7870 remain near term supports. One may wish to keep an eye on the short term channel as well. The channel crosses 8042 today and increases about 7 pips per day.

Canadian Dollar / Japanese Yen

Daily Bars

EURGBP_Rifles_Through_20_day_Average-Focus_is_on_8420_body_cadjpy.png, EURGBP Rifles Through 20 day Average-Focus is on 8420

Prepared by Jamie Saettele, CMT

Bulls continue to be thwarted by the trendline that extends off of the April, July, October, and December highs and 20 day average. A break of the 7620-7450 range will trigger the next move (towards 7348 or 7672, 7737, and 7840). Until then, sharp sideways ranges are to be expected. 7500 is short term support.

--- Written by Jamie Saettele, CMT, Senior Technical Strategist for DailyFX.com

To contact Jamie e-mail jsaettele@dailyfx.com. Follow me on Twitter @JamieSaettele

To be added to Jamie’s e-mail distribution list, send an e-mail with subject line "Distribution List" to jsaettele@dailyfx.com

Jamie is the author of Sentiment in the Forex Market.

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

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