11

Euro / US Dollar

22

Focus remains on the top of the channel from early July (5th wave channel, more on that below), which is at 1.5023 today.  The channeling nature of the EURUSD since July suggests that this labeling is correct (treating the rally from the June low as wave v of C).  This means that the push above 1.4847 is likely wave of 5 of v of C.  Again, the channel top is 1.5023 today and increases about 11 pips per day.  Wave count and momentum readings suggest a top, but not until a drop below 1.4820 would it be wise to attempt a short.      

British Pound / US Dollar

33

The GBPUSD has returned to and exceeded the head and shoulders neckline that was broken in September.  Resistance extends to a line extended from the August and September highs, which is at 1.6467 today and 1.6456 Monday.  I wrote yesterday that “longer term traders should look to position short against 1.6746 in the coming days.”  This remains the strategy so be sure to follow DailyFX Forex Stream for position updates.

Australian Dollar / US Dollar

44

The AUDUSD has exceeded .9200 and I’ve mentioned in recent days/weeks that levels to watch are .9200, .9270, and .9325 (these are former support levels from 2008).  These levels make a large zone where a reversal could occur.  RSI (14 day) is above 74 but not as high as it was at the June high, when it was above 75 (divergence still exists).  Price action has already carved out an outside day, which is a reversal warning.

New Zealand Dollar / US Dollar

55

The NZDUSD continues to look heavy, especially on hourly charts.  Dropping under .7250 would break the series of higher lows and indicate that a top is in place.  Like the AUDUSD, today’s price action has already made an outside day (which warns of a reversal).     

US Dollar / Japanese Yen

66


The USDJPY (and Yen in general) is one of the few currency pairs that I have been in synch with the past several months.  I presented a longer term bullish count earlier in the week, stating that “the decline from 101.50 is simply not an impulse.  Either a triangle or complex correction is underway since December 2008.  The next leg should be up towards 101.50 (maybe even above).  The USDJPY has broken above 90.43, confirming a short term double bottom.  Favor the upside against 88.00 and target 92.50 (measured level) as a minimum short term target.”  Move risk up to 89.90.  The push through 90.50 marked the completion of an inverse head and shoulders.  Pullbacks are common, in which case supports are at 90.50 and 90.20.  92.80 (161.8% extension) is a short term target next week.

US Dollar / Canadian Dollar

77

 “1.0317, which is the 61.8% extension of 1.3068-1.0782/1.1730, has been reached.  1.0375/1.0400 is short term resistance and a rally above 1.0527 would begin to suggest that a bottom is forming.  Additional objectives are .9914 and .9444.”  After dipping below 1.0300 (which has been a significant pivot since 2008), the USDCAD has rallied.  However, 1.0527 needs to be exceeded before I can begin to look for longs.   

US Dollar / Swiss Franc

88

No change from yesterday - “The USDCHF has dropped to a new low and is probably completing wave v of C (just as EURUSD is in the process of doing).  1.0037, the 100% extension of 1.2303-1.0367, is a potential reversal point.”

 

Jamie Saettele publishes Daily Technicals every weekday morning, COT analysis (published Monday mornings), technical analysis of currency crosses on Monday, Wednesday, and Friday (Euro and Yen crosses), and intraday trading strategy as market action dictates.  He is the author of Sentiment in the Forex Market.  Follow his intraday market commentary at DailyFX Forex Stream. 

Contact Jamie at jsaettele@dailyfx.com if you would like to receive his reports via email.