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Technical Weekly: EUR/USD Weekly Key Reversal; Carving a Base?

Technical Weekly: EUR/USD Weekly Key Reversal; Carving a Base?

2017-01-06 20:51:00
Jamie Saettele, CMT, Sr. Technical Strategist
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EUR/USD

Weekly

Technical Weekly: EUR/USD Weekly Key Reversal; Carving a Base?

Chart Prepared by Jamie Saettele, CMT

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FXTW left 2016 with the following note “sentiment towards the USD in general right now is one of euphoria, specifically against EUR and JPY, so I don’t see how it’s smooth sailing to the downside.” Rough seas make for difficult sailing. EUR/USD continues to trade on a long term parallel and the weekly wicks (key reversal this week) denote active support. I don’t like being a bear in the face of active support at a well-defined parallel…

As always, define your risk points (read more about traits of successful traders here).

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GBP/USD

Weekly

Technical Weekly: EUR/USD Weekly Key Reversal; Carving a Base?

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

GBP/USD needs to take out the December high in order to suggest anything meaningful on the upside. Until then, it’s sideways at best. Don’t forget about the 96 month (8 year) cycle low count. Pay attention to the following levels; the former floor in the 1.3500-1.3700 zone and the line that extends off of the 1992 and 1998 highs (hits the 2009 low) near 1.1000.

AUD/USD

Weekly

Technical Weekly: EUR/USD Weekly Key Reversal; Carving a Base?

Chart Prepared by Jamie Saettele, CMT

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AUD/USD sports good looking symmetry with respect to the time between major lows. It’s one reason that I like the idea of the 2016 low at .6847 holding. The other reason to get bullish in the event of constructive price action on the daily or weekly charts is the relationship between the 2011 high and 2016 low. The .618 absolute retracement of the 2011 high at 1.1080 is .6847 (1.1080 x .618). The 2016 low is .6827.” Over the next few weeks, watch .7000 (maybe just above) for support. Strength through .7535 would be viewed in a bullish light.

NZD/USD

Weekly

Technical Weekly: EUR/USD Weekly Key Reversal; Carving a Base?

Chart Prepared by Jamie Saettele, CMT

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No change for the Bird. “NZD/USD is vulnerable to say the least. The 1985-1993 trendline was resistance in Kiwi from July to November. In fact, price action since July just completed a head and shoulders top. Throw in the fact that 2 of the last 6 weeks are of the outside bearish variety the Bird looks like it’s in for a world of hurt. Also, the entire rally from August 2015 qualifies as a re-test of the long term bear move that began with the double top confirmation in early 2015. The re-test, head and shoulders, and rally from 2015 as a wedge is so textbook it scares me.”

USD/JPY

Weekly

Technical Weekly: EUR/USD Weekly Key Reversal; Carving a Base?

Chart Prepared by Jamie Saettele, CMT

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“USD/JPY may be at or near the end of the first leg of the next bull cycle just as October 1990 was the first leg of the next bear cycle.” This sentiment remains although it’s tough to have faith after Friday’s jam session. The first week of the year ends as a doji. The trendline and well-defined horizontal level (2015 support) indicate potential for a bearish outcome but don’t be stubborn on a breakout. The next level of interest wouldn’t be until roughly 121.00.

USD/CAD

Weekly

Technical Weekly: EUR/USD Weekly Key Reversal; Carving a Base?

Chart Prepared by Jamie Saettele, CMT

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There is nothing new to add to the weekly USD/CAD comments. The May-August trendline is key to the Loonie trade. “The low this week was right at the May-August trendline (wedge line). Despite the bullish outside week, it remains wise to keep the wedge interpretation of USD/CAD strength since May on the table.”

USD/CHF

Weekly (LOG)

Technical Weekly: EUR/USD Weekly Key Reversal; Carving a Base?

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

Given probes of a VERY long term parallel beginning in November 2015, this move could end up launching a rally to 1.15 or so (trendline from 1985)…at least. Note too that if this is the beginning of a major CHF devaluation, it will be launched from a running wedge (very bullish). The topside of the wedge could resist near 1.0450. .9950/71 is support and much below there would be cause for concern.

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