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EURUSD 200 Day Average Looms Near May and June Highs

EURUSD 200 Day Average Looms Near May and June Highs

2015-08-14 17:23:00
Jamie Saettele, CMT, Sr. Technical Strategist
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  • EURUSD long term downtrend resistance lines come into play with 200 day average and range highs
  • GBPUSD coiled like a spring
  • USDCHF weekly key reversal at 5 month highs

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--For more analysis and trade setups (including current positions and the ‘watchlist’), visit SB Trade Desk

EUR/USD

Weekly

EURUSD 200 Day Average Looms Near May and June Highs

Chart Prepared by Jamie Saettele, CMT

Automate trades with Mirror Trader

-“EURUSD continues to hold up at the line that extends off of the 2000 and 2001 lows. The slope of this line is similar to the slope of the line that connects the 1995 (synthetic rate) and 2008 highs. A parallel extended from the 2000 low creates a channel so don’t dismiss resistance breaks on the daily (from long term support). Above 1.1050 signals that the long side is viable towards the top of the multi-month range.”

-The top of the multi-month range is in play. Price action since the March low may compose a triangle. Under this scenario, EURUSD could rally into 1.1400 before rolling over again.

GBP/USD

Weekly

EURUSD 200 Day Average Looms Near May and June Highs

Chart Prepared by Jamie Saettele, CMT

Automate trades with Mirror Trader

-“GBPUSD has broken above its 52 week average for the first time since September 2013. There are hurdles to clear from slope resistance (on various time frames) up to about 1.60. As such, a period of consolidation below 1.60 may be in store before an attempt on 1.64+ (2 equal legs from the April low).”

-“The ‘period of consolidation’ turned into a 6 figure decline from well-defined slope resistance. The rate has turned down from below the well-defined 1.5700.” GBPUSD hasn’t done much of anything in the last 5 weeks…so be on high alert for something big! Extremely tight periods of consolidation can precede strong directional moves. Daily slope remains bullish.

AUD/USD

Weekly

EURUSD 200 Day Average Looms Near May and June Highs

Chart Prepared by Jamie Saettele, CMT

Automate trades with Mirror Trader

-“A slope confluence pinpointed the May high, which keeps the broader trend pointed lower. A long term level to be aware of in AUDUSD is the line that connects the 2001 and 2008 lows, which is near .7100.”

-“The immediate picture is bearish. Range expansion objectives yield .7143 and .6902.” The former level is joined by the trendline that extends off of the 2001 and 2008 lows. The decline from the 2011 high would consist of 2 equal legs (subdivided with the 2013 low and 2014 high) at .7084. Exceeding .7450 would indicate a change in behavior for Aussie and point towards longer term downtrend resistance in the high .7600s. Outside day reversals and volume considerations point to capitulation.

NZD/USD

Weekly

EURUSD 200 Day Average Looms Near May and June Highs

Chart Prepared by Jamie Saettele, CMT

Automate trades with Mirror Trader

-“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.”

-“A bearish wedge pattern has formed and yields an objective of .6607.” Look towards the mentioned objectives (.6607 and .5898). The wedge objective has been reached as has the 2010 low at .6560. The next levels to be aware of are .64 (61.8% retracement of the 2009-2011 rally and 50% retracement of the 2000-2011 rally) and .60 (long term double top target).

-A break above .6650 would trigger a bullish bias towards .6900-.7000.

USD/JPY

Weekly

EURUSD 200 Day Average Looms Near May and June Highs

Chart Prepared by Jamie Saettele, CMT

Automate trades with Mirror Trader

-“A USDJPY breakout from the 6 month coil would open up 123.16-124.13 (high close from June 2007 and 2007 high). A measured objective from the pattern yields 125.72 and 128.12.”

-“USDJPY ended up trading to 125.85 (the mentioned 125.72 was the December range x .618 + the December high…basically a Fibonacci range expansion). Failure at long term uptrend resistance indicates potential for an important top to form. As I type, there are 2 days left in June and USDJPY is little changed for the month (month open is 124.10). In other words, a monthly doji could form…at a 20 year trendline (former support…may provide resistance now)!”

-“June’s trade produced a monthly key reversal in USDJPY.” USDJPY has snapped back but a break above the long term resistance confluence (uptrend resistance and the line from the 1995 and 2005 highs) is still needed in order to minimize downside risk. Weakness below 123 would trigger a failed bullish pattern and consequently a bearish signal.

USD/CAD

Weekly

EURUSD 200 Day Average Looms Near May and June Highs

Chart Prepared by Jamie Saettele, CMT

Automate trades with Mirror Trader

-“A 10 month trendline has supported USDCAD on recent dips. The development indicates potential for resumption of the broader bull move.”

-“USDCAD has broken out. 11 year highs aren’t far off. The 2009 high is at 1.3062 (just below the 127.2% extension of the March-May range, which is at 1.3083).” 11 year highs have been reached. The next measured level is the 161.8% extension of the March-May range at 1.3399. The March high at 1.2834 is now support. Weakness below there would delay the immediate bullish picture until probably near 1.2700.

USD/CHF

Weekly

EURUSD 200 Day Average Looms Near May and June Highs

Chart Prepared by Jamie Saettele, CMT

Automate trades with Mirror Trader

-“The break above near term slope indicates a short term behavior change.”

-USDCHF traded to its best level since March this week and formed a weekly key reversal. This action serves as a warning to bulls that the rally from May is nearing completion. Major resistance is seen slightly higher from the 14 year trendline and 2012 high of .9971 over the next few weeks but the USDCHF top this week was right at the 78.6% retracement of the March-May decline. A break below .9656 would strongly suggest that a top of some important is in place.

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

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