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Major Cycle Influence Nears for AUD/USD

Major Cycle Influence Nears for AUD/USD

2016-04-01 18:17:00
Jamie Saettele, CMT, Sr. Technical Strategist
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  • EUR/USD contends with resistance near 1.15
  • AUD/USD Cycle Influence week after next
  • Bitcoin about to break out and rally through June

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EUR/USD

Weekly

Major Cycle Influence Nears for AUD/USD

Chart Prepared by Jamie Saettele, CMT

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-The most recent comments noted that “the failed breakout could be bearish but EUR/USD is still in a range (could end up as a triangle or flat from the 2015 low) and levels to pay attention to for support are 1.0872 (year open) and 1.0820 (May and July 2015 lows)…a break above 1.1500 would argue for the flat pattern interpretation into the mid-1.20s.” The March low was 1.0820 (also the trendline that extends off of the 1985 and 2000 low). 1.1500 remains range resistance. A break above would set an objective near 1.25.

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

GBP/USD

Weekly

Major Cycle Influence Nears for AUD/USD

Chart Prepared by Jamie Saettele, CMT

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-Recent price action formed a ‘tweezer bottom’ candlestick formation (FXTW pointed out tweezer bottoms in AUD/USD at the September and January lows). This is a reversal pattern. The fact that the pattern formed amid the chaos of headlines (sentiment extreme on ‘BREXIT’) and at a confluence of trendlines indicates increased risk for a decent sized bounce. General focus is higher, probably until the low 1.50s, although continued failure at an internal trendline is a concern. A crash could then take place into early 2017, based on a 96 month (8 year) cycle low count.

AUD/USD

Weekly

Major Cycle Influence Nears for AUD/USD

Chart Prepared by Jamie Saettele, CMT

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-AUD/USD faces resistance from the October 2013-January 2014 line, which was precise resistance in 2015 (twice). Risk of a top near the line is heightened given COT considerations. “FXTW has maintained since the start of 2016 that “divergence with RSI on the weekly serves as a bullish reversal warning and that resistance may reside in the mid .7400s.” AUD/USD has pressed into the congestion zone that dominated 2015 so near term trade may take on a more ‘choppy’ tone. Irrespective, focus is higher as per the break above the October and December highs.”

-“The 2nd week of April is lining up as a potentially important pivot in time. The 1993 and 2001 lows (latter is the all-time low) are exactly 392 weeks apart. 392 weeks from the 2001 low is the week of the October 2008 crash (the low was 3 weeks later). 392 weeks from the October 2008 crash is the week of April 11th. My colleague Kristian Kerr, whose cycle work is a must read, often stresses the importance of what a market is doing into a time window. In other words, a high/low could form if the market is heading into resistance/support within the window (and if other conditions are met of course). Also, a break of a key level during this time would warn of possible acceleration in the same direction. Context is key (always is). For now, just know that the week of April 11th is a big point on the X-Axis for Aussie.”

NZD/USD

Weekly

Major Cycle Influence Nears for AUD/USD

Chart Prepared by Jamie Saettele, CMT

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-NZD/USD is attempting to break out from a 7 month ascending triangle pattern. The objective from the pattern is mid .7400s although FXTW believes that .71-.72 (2011 low and February 2015 low) is important and could influence for another leg lower.

USD/JPY

Weekly

Major Cycle Influence Nears for AUD/USD

Chart Prepared by Jamie Saettele, CMT

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-There is no change to weekly USD/JPY comments. “The head and shoulders target is still in focus near 105, which is near the January 2014 high and October 2014 low, but it could be a while before that is reached. Don’t overlook the fact that this week’s low is 110.66…or 1 pip from the 2008 high. A parallel to the 1990-1998 line, extended from the 2007 high, is also at the low (this angle was also the neckline from the 2010-2012 inverse head and shoulders that launched the rally into last summer. Generally speaking, USD/JPY could hold up for a while longer.”

USD/CAD

Weekly

Major Cycle Influence Nears for AUD/USD

Chart Prepared by Jamie Saettele, CMT

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-There is no change to recent USD/CAD comments. “USD/CAD 1.30 has been reached so it may be time to go the other way. Weekly RSI has reached 40 as well, which is often associated with at least near term markets lows. FXTW believes that the broader bull trend has resumed but be aware of 1.3816 as a trading level.”

USD/CHF

Weekly

Major Cycle Influence Nears for AUD/USD

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

-USD/CHF is consolidating (perhaps in a wedge from the November high) and there is nothing else to add to previous comments regarding the longer term picture at this time. “Some extremely long term technical considerations are worthy of note when looking at USD/CHF. Read about them here. Long term support is at .9400 (trendline and 200 week average).”

Bonus Chart

BTC/USD (Bitcoin Bitstamp)

Major Cycle Influence Nears for AUD/USD

Chart Prepared by Jamie Saettele, CMT

-In November, FXTW suggested that BTC/USD could trade sideways for 20+ weeks before breaking higher. Next week will be week 22 from the November high. For more on why 22 weeks since the November high is interesting, read the post from November. FXTW has also noticed a cycle high count of a Fibonacci 34 weeks. Since the January 2012 high, important price highs are separated by no less than 31 weeks and no more than 34 weeks. 34 weeks from the November 2015 top is the last week in June (last week of the second quarter). A view of the daily chart reveals a well-defined ‘coil’ in price action since the November top. A breakout would yield a price objective of 710, which is also the March 2014 high. From an Elliott perspective, a test of the November 2013 high at 1163 is possible as part of a flat pattern from November 2013 (B wave rally from January 2015).

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