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EUR/USD Bullish Interpretation is Valid While above 1.1050

EUR/USD Bullish Interpretation is Valid While above 1.1050

2016-02-05 20:59:00
Jamie Saettele, CMT, Sr. Technical Strategist
Share:
  • EUR/USD breakout / 1.1050 is key
  • USD/CAD decades old support turned resistance turned…support
  • USD/CHF drops into key level

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EUR/USD

Weekly

EUR/USD Bullish Interpretation is Valid While above 1.1050

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

-The declines into March and December 2015 found support just below the line that extends off of the 1985 and 2000 lows (a parallel from the March low was close to the December low). November and December trade produced a tweezer bottom (reversal candlestick pattern…bullish in this case) as well. This week’s move through the 55 week average is important because the widely watched average was precise resistance in August and October 2015. Weekly RSI, which stalled just above 50 on the 2015 rally attempts, is attempting its own ‘breakout’ attempt. 1.1050/60 (March and December 2015 highs) is viewed as pivotal to the integrity of the bullish interpretation.

-For forecasts and 2016 opportunities, check out the DailyFX Trading Guides.

GBP/USD

Weekly

EUR/USD Bullish Interpretation is Valid While above 1.1050

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

-FXTW was looking for downside continuation last week, writing that “the underside of the 1985 and 2009 line (which broke 2 weeks ago) and an internal trendline provided precise resistance for downside continuation. The next area of interest on the downside is around 1.40.” Instead, GBP/USD surged through 1.44 and almost back to unchanged on the year (1.4731). RSI divergence on the weekly is intriguing but daily momentum at the low is more typical of a 3rd wave. So, it’s still wise to treat strength in a corrective manner.

AUD/USD

Weekly

EUR/USD Bullish Interpretation is Valid While above 1.1050

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

-Friday’s sharp sell-off in AUD/USD does not negate the ‘constructive’ possibility on the weekly chart. As noted previously, “corrective (range bound) trading behavior may very well continue given the weekly tweezer bottom (at the long term median line no less). Divergence with RSI on the weekly serves as a bullish reversal warning too.”

NZD/USD

Weekly

EUR/USD Bullish Interpretation is Valid While above 1.1050

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

-There is no change to longer term NZD/USD comments other than noting that the rally this week failed just shy of the long term median line and in line with horizontal resistance from last July. “The red lines on the chart indicate a long term RSI trend sell signal (higher RSI and lower price). The October high remains critical to any bearish interpretation. Like AUD/USD, a period of range trading may be in store given the recovery from under the November low.”

USD/JPY

Weekly

EUR/USD Bullish Interpretation is Valid While above 1.1050

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

-Despite BoJ efforts, FXTW maintained last week that “a broader topping formation is still possible.” The main reason for the stand was the fact that “the 2015 high was right at the 1990-1998 line (log scale)”. USD/JPY has retraced the entire rally from the last 2 weeks. A break of 115.50 is needed to trigger a head and shoulders top. Until then, sideways trade is the name of the game.

USD/CAD

Monthly

EUR/USD Bullish Interpretation is Valid While above 1.1050

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

-The most recent update from FXTW noted that “the 1976-1991 line, which was resistance (not precise however), could end up as support again on the next ‘correction’. That line is around 1.3600. If USD/CAD is going to ‘correct’, which might it correct from? At this point, I’d watch the 78.6% retracement of the decline from the 2002-2007 decline. The Fib is 1.4659.” USD/CAD topped at 1.4689 in January and just found support near the parallel of the mentioned long term line. With 2 important barriers on either side of price, a period of sideways trade may be in store.

USD/CHF

Weekly

EUR/USD Bullish Interpretation is Valid While above 1.1050

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

-Some extremely long term technical considerations are worthy of note when looking at USD/CHF. Read about them here. This week’s sharp decline dampens but doesn’t destroy immediate bullish prospects. There is still possible support from the top side of the 2008-2010 trendline (was resistance in January and March 2015 and support in December 2015). A break under .9786 would probably delay anything bullish until near .9400 (internal trendline).

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