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EURUSD and GBPUSD Test the Limits of Macro Downtrend

EURUSD and GBPUSD Test the Limits of Macro Downtrend

2015-05-08 18:02:00
Jamie Saettele, CMT, Sr. Technical Strategist
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  • EURUSD rejected at technical confluence
  • GBPUSD at major slope level
  • NZDUSD following through on bearish wedge

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EUR/USD

Weekly

EURUSD and GBPUSD Test the Limits of Macro Downtrend

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-“Several longer term technical observations are worthy of note; the rate found low at an important long term level (line off of 2008 and 2010 lows) and the ownership profile (as per COT) is at a record. The speculative crowd has never been more bearish…ever. Such conditions typically precede important reversals…although not necessarily right away. A break above the resistance lines (old support) would indicate that behavior has significantly changed and open up a run on 1.13.”

-EURUSD nearly got to 1.1400 this week. The combination of resistance on the weekly and daily could put a kibosh on the rally. It’s worth noting that volume of this magnitude has accompanied recovery highs before.

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GBP/USD

Weekly

EURUSD and GBPUSD Test the Limits of Macro Downtrend

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-“The sharp turn higher (and pending weekly reversal) is promising for longer term bottoming prospects, especially in light of the mentioned divergence and 2 large range weekly reversals in the last 5 weeks. Focus is now on the sliding parallel (lower red line) just shy of 1.55 over the next several weeks.”

-GBPUSD has met and slightly exceeded 1.55. This is resistance so the next near term move could go a long way in determining the next larger move. A break higher would open up the Dec high (near the next slope level) at 1.5785.

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AUD/USD

Weekly

EURUSD and GBPUSD Test the Limits of Macro Downtrend

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-“AUDUSD continues to trade between well-defined slope lines but be aware of a possible broadening bottom (very difficult pattern to trade).”

-“Trade outside of the bearish upper parallel that has contained strength since late October would shift focus to a former support line (turned resistance in January) near .8180.” AUDUSD is outside of the mentioned upper parallel. The behavior change indicates potential for a more important bullish event.

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NZD/USD

Weekly

EURUSD and GBPUSD Test the Limits of Macro Downtrend

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-“One can’t help but notice that an epic double top is possible with a target of .5898. That would trigger on a drop below .7370.”

-“The big NZDUSD double top has failed so far but slope resistance comes into play more or less at the current level and near .7800.” A bearish wedge pattern has formed and yields an objective of .6607.

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USD/JPY

Weekly

EURUSD and GBPUSD Test the Limits of Macro Downtrend

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-“Continue to favor a broad range as 119.80-120.70 as resistance and 116.40-117.10 as support. A move through either one of these zones would define target zones of 124-128 and 110-114.” I’ll add that the median line comes in near 117.80 and is an important reference point with respect to the broader trend. Adding anything else at this point would simply be forcing analysis that isn’t there.

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USD/CAD

Weekly

EURUSD and GBPUSD Test the Limits of Macro Downtrend

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-“The breakdown from a 2 and a half month topping pattern could ‘kick-off’ a much larger decline but near term focus is on early congestion from 1.1931 to 1.2046.”

-The latter level was nearly reached this week (low at 1.1939). The rate needs to establish above 1.22 (bearish median line) in order to suggest that some sort of a low is in place.

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USD/CHF

Weekly

EURUSD and GBPUSD Test the Limits of Macro Downtrend

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-“USDCHF has reversed from 9 year trendline resistance. Focus is on the median line (about .9300) that extends off of the 2012 high. This line crosses through highs in 2013 and the October 2014 low. The 52 week MA is near this line as well.”

-USDCHF plunged under the median line but recovered to finish the week. USDCHF needs to establish above .9420 in order to suggest that a more important low is in place.

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