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EURUSD and USDCHF Trendline Breaks Highlight Trend Shifts

EURUSD and USDCHF Trendline Breaks Highlight Trend Shifts

2014-01-17 21:54:00
Jamie Saettele, CMT, Sr. Technical Strategist
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I touched on other pairs (including exotic and non-USD crosses) in Friday’s DailyFX Plus webinar (video is titled Jamie’s Webinar 01-17-2014).

--Subscribe to Jamie Saettele's distribution list in order to receive a free report to your inbox once a day.

--Trading specifics are availabletoJ.S. Trade Desk members.

EUR/USD

Weekly

EURUSD_and_USDCHF_Trendline_Breaks_Highlight_Trend_Shifts_body_Picture_7.png, EURUSD and USDCHF Trendline Breaks Highlight Trend Shifts

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-On December 27th, the EURUSD failed at the line that extends off of the 2008 and 2011 highs.

-The failure also raises the possibility of a double top with the October and December highs. The pattern would trigger below 1.3294 and yield a 1.2757 objective. This level is in in line with the 2013 low.

-1.3400 is a possible reaction area ahead of 1.3294.

GBP/USD

Weekly

EURUSD_and_USDCHF_Trendline_Breaks_Highlight_Trend_Shifts_body_Picture_6.png, EURUSD and USDCHF Trendline Breaks Highlight Trend Shifts

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-GBPUSD broke above the line that extends off of the 2009 and 2011 highs the week that ended 11/29/13. The rally has so far failed just shy of the August 2011 high. Price is on the cusp of testing that line from above but a drop below 1.6259 would indicate a failed breakout attempt.

-Do not dismiss the January 2ndbearish outside reversal. In fact, that day’s close (1.6449) was resistance on Friday. The area around 1.6450 was resistance in December as well.

AUD/USD

Weekly

EURUSD_and_USDCHF_Trendline_Breaks_Highlight_Trend_Shifts_body_Picture_5.png, EURUSD and USDCHF Trendline Breaks Highlight Trend Shifts

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-The AUDUSD measured level from the latest break is .8554 but be aware of possible trendline support (downward sloping) at .8712 next week. Intramonth pivots from August and July 2010 are .8770 and .8632.

-This market has already made a massive outside week. This week actually engulfs the prior 4 weeks. Given the proximity of technical levels cited, I’m more inclined to treat this move as exhaustion (at least temporarily) than continuation. The next few days may clarify.

NZD/USD

Weekly

EURUSD_and_USDCHF_Trendline_Breaks_Highlight_Trend_Shifts_body_Picture_4.png, EURUSD and USDCHF Trendline Breaks Highlight Trend Shifts

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-NZDUSD spiked through the November high and reversed just shy of the September high. .8450-.8550 has been an area that ‘created’ a number of important tops in recent years.

-Longer term trend remains sideways, possibly within the confines of a triangle (since 2011). In general, the market has entered longer term resistance (highs in March 2012, December 2012, February 2013, and October 2013).

USD/JPY

Weekly

EURUSD_and_USDCHF_Trendline_Breaks_Highlight_Trend_Shifts_body_Picture_3.png, EURUSD and USDCHF Trendline Breaks Highlight Trend Shifts

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-USDJPY is respecting the gap from October 2008 at 105.30. This level and the outside day seen on January 2nd should at least warn of a pause in the uptrend.

-An exceptionally steep trendline that connects the lows from November 2012 and October 2013 just about intersects with the July high of 101.52 next week. Obviously, it would take an exceptional decline to reach that level. The line that connects the 1998 and 2007 highs is at about 106.70 next week.

USD/CAD

Weekly

EURUSD_and_USDCHF_Trendline_Breaks_Highlight_Trend_Shifts_body_Picture_2.png, EURUSD and USDCHF Trendline Breaks Highlight Trend Shifts

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-After a month of trading between roughly 1.0700 and 1.0560, USDCAD has broken out. Measured objectives from the breakout above the 2011 high range from 1.1680 to 1.1910. The Jul 2009 high rests in this zone at 1.1724 and the 2007 high is near the top of the zone at 1.1875.

-From an Elliott perspective, it’s possible that the rally from the 2012 low composes a ‘3rd of a 3rd (or C)’ wave from the 2007 low. Such market swings tend to exhibit extreme rates of change (so please refrain from terms such as ‘overbought’ or ‘divergence’).

USD/CHF

Weekly

EURUSD_and_USDCHF_Trendline_Breaks_Highlight_Trend_Shifts_body_Picture_1.png, EURUSD and USDCHF Trendline Breaks Highlight Trend Shifts

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-The USDCHF may have completed a corrective decline from the 2012 high in late December. The decline is in 3 waves, channels in a corrective manner (connect the origin of waves A and C and project a parallel from the terminus of wave A to project the terminus of wave C), and consists of 2 equal waves (would be exactly equal at .8888…the lowest weekly close was actually .8885).

-The break above the trendline that originates at the July high adds credence to a larger trend change. Do be aware of the presence of the June low at .9129 and November high at .9250 as levels that could provoke a reaction.

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