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Euro / US Dollar

eur0409

 

Joel: EUR/USD – The overall structure remains grossly bearish and the market appears to be attempting to put in a lower top by 1.3590, to be confirmed on the next downside extension below the current 2010 lows at 1.3270. A break below 1.3270 exposes a direct test of key psychological barriers by 1.3000, while only back above 1.3590 would now delay the structure and give reason for pause. Key short-term resistance comes in by 1.3410.



 

Jamie:  The larger EURUSD trend is down but yet again, bears were thwarted yesterday and the pair has rallied nearly 200 pips off of its low.  I’ve toyed with the idea that a larger correction is underway but from a trading standpoint, it is not wise to buck the trend until sufficient evidence has arisen that the trend has turned.  As long as price is below 13600, I lean bearish in expectation of a more extended decline towards the Fibonacci objective of 12765.  Above there would put the pair on track towards 13800-14000.
 

eurusd0409 

 

British Pound / US Dollar

gbp0409

Joel:  GBP/USD: The market looks to be in the process of a bearish consolidation since early March, with an eventual break below 1.4780 to confirm and open the next major downside extension. Key short-term resistance comes in by 1.5375, with a break back above this level required to take the immediate pressure off of the downside. Ultimately however, only back above 1.5375 would force a shift in the structure and give reason for pause. As such, we look for a near-term topside failure and break back below short-term support at 1.5130 to put the pressure back on the downside and re-open a test of critical support by 1.4780. 
   
   
 Jamie:   Similar to the EURUSD, I view GBPUSD strength from 14780 as corrective rather than the beginning of a new advance.  Recent commentary has mentioned that “either a triangle or flat is underway as a 4th wave correction in the GBPUSD.   In the event of a flat, the pair would exceed 15386 slightly before reversing.”  15386 was exceeded slightly this morning but there is no way to tell if the rally is complete at this point.  Wait to see how the day ends; a close in the lower half of the day’s range would give bears ammo.
 


 

 gbpusd0409

 

Australian Dollar / US Dollar

aud0409

Joel: AUD/USD: Despite the recent surge back above 0.9200, we retain a bearish bias and look for the market to top out somewhere ahead of 0.9400 in favor of a major bearish resumption. The level to watch below comes in by 0.9165, and we would recommend looking to establish short positions on a break below in anticipation of some fresh declines back through 0.9000 and towards 0.8600-0.8800 over the coming weeks. Only back above 0.9400 delays outlook.  .

Jamie:    The AUDUSD has broken above its 5 month resistance line and focus is now on the January high at 9330 and then the 2009 high of 9411.  Fibonacci objectives are 9363 and 9509 (100% and 161.8% extensions of the 8985-9221 advance).  However, beware that 21 day ATR is at its lowest since the July 2008 top.  This low level of volatility indicates complacency and the potential for a reversal.  The pivot level is 9161 (below there would increase the probability of a reversal).  Until a drop below there, respect upside potential.   

 

audusd0409

 

New Zealand Dollar / US Dollar

nzd0409

Joel:    NZD/USD: Despite the surge back above 0.7100, we retain a bearish bias and look for the market to top out by 0.7180 ahead of a major bearish resumption. The key short-term level to watch below comes in by 0.6965, and we would recommend looking to play a break back below this level in anticipation of some renewed weakness towards 0.6800 over the coming days; a break of which will accelerate further towards 0.6500.   
 
Jamie:    

Since the October top at 7640, the NZDUSD has stair stepped lower.  The structure of the decline at this point is 3-3-5, which is the substructure of a flat.  However, there are several variations that would allow for the beginning of a larger decline and the October candle (below) has the ‘look’ of a more important top.  As long as price is below 7446, I lean towards a long term bearish position.  7240 is resistance.

 

nzdusd0409

 

US Dollar / Japanese Yen

yen0409

Joel:     USD/JPY: Has been very well supported on dips, and we look for the most recent sharp rebound to open a sustained push back above the recently broken 93.75 former 2010 highs. The latest impressive rally to 94.80 reaffirms our outlook with the market now threatening a push towards 97.80 further up. Daily studies are however in the process of unwinding from overbought but we look for any setbacks to now be well supported ahead of 92.00.  Thursday’s 92.80 low could now be the higher low we are looking for.
 
 
Jamie:The expected pullback may be complete in the USDJPY.  For days, I’ve mentioned that “9300 intersects with the channel line Thursday afternoon.  That is a level to look for longs against 9100.”  The level has been met and I favor the upside against 9100 for a move above 9480 and test of 9500 (9700 is an objective from a longer term Fibonacci extension).
 
 

usdjpy0409

 

US Dollar / Canadian Dollar

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Joel:   Our overall outlook for the pair remains highly constructive and as such, any dips below parity should be used as formidable buy opportunities. At this point however, we can not rule out the potential for a short lived dip to test 0.9900. But any additional declines should ultimately be well supported by 0.9900 which represents the 78.6% fib retracement off of the major 2007-2009 move. Longer-term cyclical studies continue to warn of some major upside ahead and Wednesday’s bullish outside day formation could be the start. 
  
 
Jamie: After testing the July 2008 low (9971), the USDCAD may have put in a more important low.  I want to see the low hold for the rest of the week before taking action but the 100+ pip rally is certainly constructive. 
 
 

     

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US Dollar / Swiss Franc

chf0409

Joel: The overall structure is constructive with a medium-term higher low now sought out by 1.0435 in favor of the next major upside extension beyond 1.0900 and towards 1.1500 further up. Ultimately, it is the 200-Day SMA that we use as our gauge for direction, with the longer-term SMA, which comes in just under 1.0500, expected to continue to prop setbacks on a close basis. So long as the market holds above this SMA on a close basis, we recommend looking for opportunities to be long. Wednesday’s break back above 1.0750 helps to confirm bias and should accelerate gains. Short-term support now comes in by 1.0680.
 
Jamie:   The overlapping nature of the USDCHF advance from 9916 is a warning that the rally may be a completed 3 wave correction.  This is at odds with the larger degree structure however (5 waves up from 9634 and 3 waves down from 12303).  The bullish count (and it is extremely bullish) treats the stair-stepping advance from 9916 is a series of 1st and 2nd waves.  If this is correct, then a 3rd of a 3rd wave advance is underway to much higher levels.  Price needs to stay above 10433 in order for me to remain confident in this extremely bullish count.    
  
  

usdchf0409

 

Euro / Japanese Yen

eurjpytable-0409

Joel:   Gains have stalled out for now ahead of 128.00, with the market pulling back below previous neckline resistance of a major inverse head & shoulders formation at 125.25. Markets however do have a tendency of retracing to retest and slightly exceed former necklines one broken, so we would not rule out the possibility of a higher low now in place by Thursday’s 123.40 lows and resumption of gains ultimately towards the inverse h&s pattern objective by 130.00 over the coming days. Look for a break back above 126.20 to strengthen case for bulls, while a close below 124.00 should be concerning and could potentially warn of longer-term bearish resumption.
 
 
                           Jamie:   Last update, I wrote that “the EURJPY met resistance just shy of 12800 from a potential channel line.  I discussed the importance of the 12700/50 area last week, noting that the level had served as both support and resistance for nearly a year.  Staying below last week’s low keeps the pair headed lower towards 12666 and 12550.”  The EURJPY plunged to 12340 but has recovered part of the decline.  The trend remains up as the series of higher lows and highs from 11963 is intact.  In fact, the EURJPY has formed a solid bullish channel.  12500 is support.
 

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British Pound / Japanese Yen

gbpjoy0409-table

Joel:   The market has stalled just shy of our objective by 145.00, with daily studies now in the process of unwinding from overbought levels.  From here it is difficult to establish a clear directional bias. Look for a break back above 145.00 to extend gains and potentially open additional upside towards 150.00, while a close back under 142.00 will suggest that an interim high has been carved out by 145.00 in favor of renewed weakness towards 139.00.

Jamie:  The GBPJPY has exceeded its resistance line and focus is now on a Fibonacci objective at 14655.  The decline from 14500 is clearly a correction (3 waves), which reinforces a bullish bias (with the caveat being that a flat correction could end below the 14090).  14270 is short term support.
 
 


gbpjpy0409

 

Euro / British Pound

eurgbp-table0409

Joel:  After carving out an inverse head & shoulders base back in February and reaching the measured move objective by 0.9100, the market has since been in the process of topping out and looking to now establish a fresh medium-term lower top ahead of the next major downside extension back towards 0.8600 over the coming days. The recent break back below 0.8885 confirms bias and should accelerate declines, while ultimately, only back above 0.9130 negates and gives reason for pause. Shorter-term technicals are however approaching oversold, so we would recommend looking to sell into rallies towards 0.8900 rather then selling on breaks or at current levels.
 
 
                             Jamie:Wave E of a triangle that has been underway since December 2008 (last day of that month) may be nearing completion.  The pair has entered and slid just below the long cited support zone of 8750-8850 and I am on the lookout for formation of a low now (may even be in place with today’s low).  It is time to test the long side.  8600 is critical for the triangle count.  
    

eurgbp0409

 Tradelist

table0409

 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 jsaettele@dailyfx.com.