http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0820techs2.gif
Commentary:The decline from 1.3838 is either large wave C to complete an A-B-C correction, wave 3 in a bearish sequence that began at 1.3852, or larger wave A to begin a larger correction from 1.3852.A rally above 1.3546 would make the advance from 1.3360 impulsive (5 waves) and favor additional gains.A rally through 1.3608 would eliminate the idea that wave 3 down unfolded from 1.3838.At this point, upside potential outweighs downside risk in the near term.
Strategy:Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0820techs3.gif
Commentary:We wrote last week that we were looking for larger wave 2 to eventually challenge 119.83 before the next big move down.The rally from 111.59 may be the first leg of a 3 wave correction that will be larger wave 2.Potential reversa points prior to 119.83 are 117.86 and 119.34 (50% and 61.8% of 124.13-111.59).
Strategy: Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0820techs4.gif
Commentary: Cable appears to have some additional downside potential, but not before a push through 1.9935 occurs in order to complete a corrective advance (wave iv) from 1.9651.Following the completion of wave iv, we expect price to register a new low (beneath 1.9651) in what will be wave v of 3.A larger 4th wave correction would be expected following the new low.This view is favored as long as price is below 2.0155.
Strategy: Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0820techs5.gif
Commentary:The USDCHF remains the trickiest pair to get a hold on right now.We were prepared to turn bullish if the advance from 1.1815 traced out 5 waves.As it turned out though, the rally ended in 3 waves, therefore additional downside potential remains.A drop under 1.1993 would complete 5 waves down from 1.2215.If this happens, then we will look for a corrective rally in order to get bearish.
Strategy:Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0820techs6.gif
Commentary: After hitting our first bullish target at 1.0821 (the USDCAD reversed at 1.0866), the pair has declined nearly 300 pips.A drop below 1.0559 would complete 5 waves down from 1.0866 and indicate additional bearish potential.Until then, upside potential remains.
Strategy: Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0820techs7.gif
Commentary:The Aussie is in an interesting position right now.The advance from .7673 has stalled at the 38.2% of .8661-.7673.The rally is also in 3 waves so it is possible that a 4th wave is complete or close to complete at .8065.A drop under .7673 would complete 5 waves down from the top (.8870) and give scope to a large correction higher.
Strategy: Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0820techs8.gif
Commentary: Kiwi is in a similar situation (compared to Aussie).That is, a 4th wave correction may be complete or close to complete at .7026.The 38.2% of .7701-.6639 is at .7045 and is potential resistance.A drop under .6639 would make the decline from the top (.8108) 5 waves.A large upward correction would follow.
Strategy:Flat
***JTREND is a proprietary calculation that uses recent highs, lows and closes to determine the trend.JTREND uses the last 4 weeks of price data (highs, lows, closes).An example is below.Blue bars denote bullish trend and red bars denote bearish trend.The chart below is the EURUSD weekly chart. http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0801techs9.gif
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http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/Tech_08-17-07-1EURUSD.gif
Commentary:After making a spike double bottom at 1.3367 the EURUSD appears to have stabilized and now look sto be making a retrace rally. The pair however faces a series of resistance points in its climb higher needing to clear 1.3577, 1.3621, 1.3659 and 1.3701 in order to restablish a bulish bias
Strategy:A retrace rally is in the making but beware of resiatnce overhead
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/Tech_08-17-07-2USDJPY.gif
Commentary: USDJPY is grossly oversold having stretched itself more than 500 points from the 200 period SMA but massive volatiliy in the pair creates very wide ranging bars. Still the near term bias appears to the upside as price may want to retrace bacl to the moving average before retetsting the lows
Strategy: Long but cautious of massive volatility
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/Tech_08-17-073GBPUSD.gif
Commentary: Pound has made on of the more unique chart patterns carving out a spike bottom on the hourly time frame. The power of the reversal move has pushed the pair thropugh the initial resitance level of 1.9863 but it still faces multiple tests in its climb to higher ground.
Strategy: Move to flat (previously bearish), looking for a retrace to 1.9958 to get bearish again
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/Tech_08-17-074USDCHF.gif
Commentary: USDCHF presents one of the more inetersting patterns today having found support at the 200 SMA level making a higher low which suggest that the bullish bias persists in the pair. However 1.2200 remains a key objective to overcome if the pair is to sustain any upside momentum
Strategy: Longs but mindful of the 1.1950 support level
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/Tech_08-17-075USDCAD.gif
Commentary: The USDCAD has staged a massive reversal breaking multiple supports along the way. The price asuggests further downside action to come as bears clearly have taken control of the pair. Only a shapr retrace above the 1.0750 level invalidates the down move anf for now the target could move well within the 1.0500 range
Strategy: Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/Tech_08-17-076AUDUSD.gif
Commentary:Aussie remains in a massive downtrend with both trendline and SMA resistance . So far the upside bounce has been meager at best with pair unable to hold hourly highs. A test of the double bottom at 7673 is likely.
Strategy: Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/Tech_08-17-077NZDUSD.gif
Commentary: Kiwi imuch like the Aussie has staged a rally off the lows. However the price action in the kiwi looks to be more constructive as the pair appears tohave made a bottom at 6639 and now looks to 6900 an dthen further 7000 as next levels of resistance.
Strategy:Flat
- Borris Schlossberg, Senior Currency Strategist
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0816techs2.gif
Commentary:We wrote yesterday that “a test of 1.3445 looks inevitable now as price is below 1.3500 now.The extent of the decline from 1.3838 makes it highly unlikely that this decline is a C wave.Instead, it is much more likely that this decline is a 3rd wave.”Price dropped right through 1.3445 to test 1.3360 this morning.We maintain that the decline from 1.3838 is wave 3 within a larger 5 wave decline from 1.3852.Larger wave 4 should begin to unfold soon.Near term resistance is at 1.3447.Since a 5th wave is still to come, there is little chance of a significant bottom forming at nearby levels.
Strategy:Bearish target hit at 1.3445 (waiting for wave 4 retrace in order to get bearish)
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0816techs3.gif
Commentary:The action this morning makes it likely that the USDJPY is currently entrenched in a wave 3.The count that we proposed yesterday had the USDJPY bottoming near 115.53 in a 5th wave (larger wave 1 down from 124.13), which would be followed by a wave 2 back towards 119.83.It is still possible that the decline from 119.83 is wave 5 down within the 5 wave decline from 124.13.In this case, the risk of a correction back towards 119.83 is high, but not until some consolidation in small wave 4 is followed by lower prices to complete the decline from 119.83.
Strategy: Flat, we will be waiting for the larger wave 2 to unfold before getting aggressive
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0816techs4.gif
Commentary: We wrote yesterday that “that 1.9700 will be tested before the week is over.Wave 3 down has been unfolding since 2.0462.Within wave 3, the decline from 2.0397 is a third wave.Therefore, look for a corrective 4th wave to play out before a test of 1.9700 and completion of wave 3 from 2.0462.A larger 4th wave would then be expected.”The small corrective 4th played out and ended at 1.9958 and price then dropped to 1.9769 (close enough to our objective of 1.9700 to suggest that near term bearish potential is limited).The larger 4th wave that we mentioned yesterday should unfold soon and bring price back to 1.9958 (+-) before a drop in wave v of 3 towards 1.9500.The correction will probably be choppy though, possibly a triangle or a flat.On the weekly (or daily), the Pound has dropped below a supporting trendline that dates to October 2006.
Strategy: Move to flat (previously bearish), looking for a retrace to 1.9958 to get bearish again
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0816techs5.gif
Commentary:Please see yesterday’s commentary for longer term analysis (daily chart).A push through 1.2215 will make the rally from 1.1815 5 waves and indicate that a longer term bull trend is underway.Near term bullishness is limited though as the rally through 1.2215 will complete larger wave 1 and give way to a corrective decline in larger wave 2.That will offer an opportunity.
Strategy:Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0816techs6.gif
Commentary: The USDCAD continues to work higher in an impulsive manner, proving our thesis that a significant bottom is in place at 1.0340 correct.We are looking for this rally to challenge 1.1043 (161.8% extension of 1.0340-1.0699/1.0462) before any sizeable retracement occurs.Near term, a correction to 1.0726 offers an opportunity to align with the bull trend.We are showing the 15 minute chart this morning.
Strategy: If already bullish then remain so, against 1.0641, target 1.0821 hit , target 2 at 1.1043.Those on the sidelines can look to align with the bull trend at 1.0726
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0816techs7.gif
Commentary:The idea that the Aussie would bottom near .8162 and head higher was certainly wrong as the AUDUSD has plummeted below .8000.The decline from .8661 needs to undergo a small correction before registering a new low, after which a larger correction in wave 4 would offer bears the opportunity to act.
Strategy: Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0816techs8.gif
Commentary: Kiwi is in a similar situation (compared to Aussie).The next potential support level is the 3/6 low of .6719.The extent of the decline from .7701 leaves little doubt that wave 3 is in progress.The good news is that this is wave 3 of larger wave 1.Therefore, we should see a decent sized retracement in the coming weeks in order to position for the next big leg lower.Near term, the decline is subdividing but a short term bottom should occur soon.A rally to .7201 offers an opportunity get bearish.
Strategy:Flat
***JTREND is a proprietary calculation that uses recent highs, lows and closes to determine the trend.JTREND uses the last 4 weeks of price data (highs, lows, closes).An example is below.Blue bars denote bullish trend and red bars denote bearish trend.The chart below is the EURUSD weekly chart.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0801techs9.gif
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http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0815techs2.gif
Commentary:We wrote yesterday that “to favor the downside as long as price is below 1.3625.Look for a test of 1.3445 in the next few days.”A test of 1.3445 looks inevitable now as price is below 1.3500 now.The extent of the decline from 1.3838 makes it highly unlikely that this decline is a C wave.Instead, it is much more likely that this decline is a 3rd wave.Price is likely to consolidate soon in a small wave 4 before completing the 3rd wave decline from 1.3838 (in its 5th wave).The chart above details what we are expecting to occur.
Strategy:Remain Bearish, move risk to 1.3608 (from 1.3625), target 1 hit at 1.3600, next target at 1.3445
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0815techs3.gif
Commentary:While the small correction that we were looking for failed to play out, the USDJPY has registered a new low (beneath 117.18), which satisfies minimum expectations for the completion of wave 5 within the 5 wave decline from 124.13.Looking at the structure of the 5th wave, a 4th wave correction is needed before wave 5 of 5 completes the sequence.The next move of consequence is likely a large wave 2 correction back towards 120.00 (this may be in a week or two though) although we do expect the pair to chop lower in the near term (possibly towards 115.00).A measured objective is where wave 5 would equal the price distance of waves 1 through 3, at 115.53.
Strategy: Flat, we will be waiting for the larger wave 2 to unfold before getting aggressive
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0815techs4.gif
Commentary: We wrote yesterday that “with Cable appearing to be subdividing lower, continue to favor the downside and a test of 1.9700, as long as price is below 2.0132.”The GBPUSD has continues to slide and is now below 1.9900.We maintain that 1.9700 will be tested before the week is over.The wave structure is the same as the EURUSD.That is, wave 3 down has been unfolding since 2.0462.Within wave 3, the decline from 2.0397 is a third wave.Therefore, look for a corrective 4th wave to play out before a test of 1.9700 and completion of wave 3 from 2.0462.A larger 4th wave would then be expected.
Strategy: Remain bearish, against 2.0132, target 1 hit at 2.0000, next target at 1.9700
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0815techs5.gif
Commentary:The USDCHF has ralliedbut remains below 1.2165.A push through 1.2165 would do wonders for the longer term bullish outlook.We had been looking for price to continues lower towards 1.1400 following the break of the 14 month triangle.Thrusts from triangles are terminal, but a triangle that forms for 14 months usually experiences a much more impressive thrust than the one that we saw in the USDCHF.Either way, the triangle that formed from May 2006 is possibly large wave B in an A-B-C correction that began at the November 2005 peak (1.3285).The thrust lower is wave C of this correction.Still, it seems unlikely that wave C would be this small, but a break above 1.2165 would suggest that this is the case.If 1.1815 is the bottom of wave C, then the USDCHF is in the early stages of a multi-month (possible year +) rally.
Strategy:Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0815techs6.gif
Commentary: We wrote yesterday that “we see it as highly likely that the rally from 1.0484 is the beginning of a third of a third wave.This is the position that often sees the market move the fastest.We expect the rally to accelerate in the next few days.”The USDCAD has rallied over 200 pips from yesterday morning.The only question is whether or not the rally from 1.0462 is a wave 3 or a wave C.If price rallies much above 1.0821 (100% extension of 1.0340-1.0699/1.0462), then it is likely that the rally is a wave 3 and is headed for a test of the 161.8% extension at 1.1043.From a subjective standpoint, we favor the impulse rally scenario (wave 3) and the idea that the USDCAD has put in a multi-year low at 1.0340.Short term support is at 1.0712.See our special report from July 31 for a longer term outlook at http://www.dailyfx.com/story/topheadline/USD_CAD___Going_to_1_40__1185908241736.html
Strategy: If already bullish then remain so, against 1.0641, target 1.0821 and 1.1043.If not, then sit tight as the current reward to risk does not justify entry
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0815techs7.gif
Commentary:We wrote yesterday that “we are looking for a drop to .8235.”The Aussie has dropped below .8235 and the next level of potential support is the 5/29 low at .8162.Remember that the longer term structure suggests that the drop from .8870 is a wave 4 and that a new high will be registered (above .8870) before a bigger decline corrects the rally from .7268.For this bullish count to remain favored, price needs to bottom close to (or above) .8162.
Strategy: Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0815techs8.gif
Commentary: We wrote yesterday that “a measured objective for the end of the decline is the 100% extension of .8108-.7553/.7701 at .7146.Continue to favor the downside and test of the mentioned levels.”Kiwi is right at the objective of .7146.Considering the longer term bullish AUDUSD count (and the fact that the NZDUSD is highly correlated with the AUDUSD), and the idea that Kiwi has broken lower from a triangle (triangle breaks are terminal), we think it highly probable that the pair finds a bottom near current price.However, there is no evidence of a bottom.We will not take action until we see evidence of one.A drop to .6803 (161.8% extension) would strongly indicate that the longer term bullish idea is wrong.We would then look to sell a corrective rally.
Strategy:Flat
***JTREND is a proprietary calculation that uses recent highs, lows and closes to determine the trend.JTREND uses the last 4 weeks of price data (highs, lows, closes).An example is below.Blue bars denote bullish trend and red bars denote bearish trend.The chart below is the EURUSD weekly chart.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0801techs9.gif
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http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0814techs2.gif
Commentary:We wrote yesterday that “price is likely to continue lower towards the 100% of 1.3852-1.3608/1.3838 at 1.3595.The next bearish target is the 161.8% extension at 1.3445.”Given that the 100% extension has been breached and that the decline appears to be subdividing, we continue to favor the downside as long as price is below 1.3625.Look for a test of 1.3445 in the next few days.
Strategy:Remain Bearish, move risk to 1.3625 (from 1.3838), target 1 hit at 1.3600, next target at 1.3445
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0814techs3.gif
Commentary:There is no change to the USDJPY as the correction that we proposed was playing out has proved correct so far.“The USDJPY decline from 119.83is likely the first leg lower in the next bear wave.Look for a rally above 118.74 to challenge the 61.8% of 119.82-117.21 at 118.83 and possibly the 78.6% at 119.27 before a top and reversal.The larger bearish bias is strong below 119.83.”Wave c of the flat correction (from 117.68) would equal wave a (117.21-118.74) at 119.20.
Strategy: Flat, look to get bearish near 119.20, against 119.83, targets below 117.15
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0814techs4.gif
Commentary: We wrote yesterday that “the bearish targets are 1.9989 and 1.9697.Look for the decline to accelerate in the next day.”Cable’s decline has accelerated as the pair tested the mentioned 1.9989 (100% extension of 2.0654-2.0181/2.0462) this morning.This is a critical point as a bottom and reversal is possible at this level (since the A-B-C correction may be complete).However, with no evidence of a bottom in the EURUSD and with Cable also appearing to be subdividing lower, continue to favor the downside and a test of 1.9700, as long as price is below 2.0132.
Strategy: Remain bearish, move risk to 2.0132 (from 2.0397), target 1 hit at 2.0000, next target at 1.9700
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0814techs5.gif
Commentary:We were looking for a top and reversal close to the 61.8% of 1.2165-1.1815 at 1.2032 but the USDCHF pushed through to test the 78.6% at 1.2090.We wrote yesterday of a thrust from a triangle, which is why we remain bearish (thrusts from triangles are usually terminal and eventually reverse).As mentioned last week, the larger bearish pattern is intact as long as price is below 1.2165.
Strategy:Remain Bearish against 1.2165, target 1.1400
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0814techs6.gif
Commentary: We maintain that the USDCAD is in a rally leg that will push through 1.0699.The rally from 1.0484 and through 1.0564 instills confidence in the upside.We see it as highly likely that the rally from 1.0484 is the beginning of a third of a third wave.This is the position that often sees the market move the fastest.We expect the rally to accelerate in the next few days.
Strategy: Remain Bullish, against 1.0462, targets 1.0821 and 1.1043
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0814techs7.gif
Commentary:We wrote of two scenarios yesterday.The second one “has wave C of 4 still in progress and therefore price continuing lower towards the 100% extension of .8870-.8444/.8661 at .8235 before a low is extablished.A drop under .8398 strongly suggests that this is playing out”.The drop under .8398 occurred and we are looking for a drop to .8235.This remains our bias unless .8504 is taken out, at which time bullish potential comes to the forefront.
Strategy: Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0814techs8.gif
Commentary: We wrote yesterday that “a measured objective for the end of the decline is the 100% extension of .8108-.7553/.7701 at .7146.Chart support is at .7237 (5/24 low).”Continue to favor the downside and test of the mentioned levels.The near term bear case is strong as long as price is below .7488.
Strategy:Flat
***JTREND is a proprietary calculation that uses recent highs, lows and closes to determine the trend.JTREND uses the last 4 weeks of price data (highs, lows, closes).An example is below.Blue bars denote bullish trend and red bars denote bearish trend.The chart below is the EURUSD weekly chart.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0801techs9.gif
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http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0813techs2.gif
Commentary:We continue to view the decline from 1.3838 as wave C in a larger A-B-C correction from 1.3852.Price is likely to continue lower towards the 100% of 1.3852-1.3608/1.3838 at 1.3595.The next bearish target is the 161.8% extension at 1.3445.We mentioned Friday that a bounce towards 1.3714 would complete a smaller correction and give way to the downside.The EURUSD rallied to 1.3708 last night before declining to current levels.The fact that the decline from 1.3825 to 1.3641 is in 5 waves bolsters the bearish outlook.
Strategy:Remain Bearish against 1.3824, targets 1.3600 and 1.3450
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0813techs3.gif
Commentary:TheUSDJPY decline from 119.83is likely the first leg lower in the next bear wave.Look for a rally above 118.74 to challenge the 61.8% of 119.82-117.21 at 118.83 and possibly the 78.6% at 119.27 before a top and reversal.The bearish bias is strong below 119.83.
Strategy: Flat, look to get bearish between 118.83-119.27, against 119.83, targets below 117.15
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0813techs4.gif
Commentary: We wrote yesterday that “the best count has the decline from 2.0461 as large wave C in an A-B-C from 2.0654 (same as EURUSD).”The bearish targets are 1.9989 and 1.9697.The decline from 2.0397 is likely the third wave within larger wave C.Look for the decline to accelerate in the next day.The bearish bias is favored as long as price is below 2.0269.
Strategy: Remain bearish, against 2.0269, targets 2.0000 and 1.9700
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0813techs5.gif
Commentary:The USDCHF pattern is not completely clear but there is little doubt that the recent rally is corrective in nature.Thus, we are expecting a top and reversal close to current price (the 61.8% of 1.2165-1.1815 at 1.2032 is a potential reversal point).It is also possible that the recent thrust higher was from a small triangle.This fits with the idea of a top and reversal near current price. As mentioned last week, the larger bearish pattern is intact as long as price is below 1.2165.
Strategy:Remain Bearish against 1.2165, target 1.1400
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0813techs6.gif
Commentary: We maintain that the USDCAD is in a rally leg that will push through 1.0699 (likely next week).Target are 1.0821 (100% extension of 1.0340-1.0699/1.0462) and 1.1043 (161.8% extension).The rally from 1.0462 is either larger wave C or 3.This view is favored as long as price is above 1.0462.Very near term, it is possible that price drops below 1.0514 to complete a small correction.
Strategy: Remain Bullish, move risk to 1.0462 (from 1.0340), targets 1.0821 and 1.1043
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0813techs7.gif
Commentary:There are two scenarios that we are following closely.One is that the AUDUSD is in the process of forming the wave 4 low and that price is headed higher immediately in wave 5.The other has wave C of 4 still in progress and therefore price continuing lower towards the 100% extension of .8870-.8444/.8661 at .8235 before a low is extablished.A drop under .8398 strongly suggests that the latter scenario is playing out.
Strategy: Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0813techs8.gif
Commentary: Kiwi continues to work lower in wave Cof the A-B-C correction that began at .8108 on 7/24.A measured objective for the end of the decline is the 100% extension of .8108-.7666/.7701 at .7125.Chart support is at .7237 (5/24 low).The near term bearish bias is strong as long as price is below .7488.
Strategy:Flat
***JTREND is a proprietary calculation that uses recent highs, lows and closes to determine the trend.JTREND uses the last 4 weeks of price data (highs, lows, closes).An example is below.Blue bars denote bullish trend and red bars denote bearish trend.The chart below is the EURUSD weekly chart.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0801techs9.gif
< Prev Next > [ Back
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0810techs2.gif
Commentary:We wrote yesterday that “the decline from 1.3838 is wave C in a larger A-B-C correction from 1.3852.Price is likely to continue lower towards the 100% of 1.3852-1.3608/1.3838 at 1.3595.The next bearish target is the 161.8% extension at 1.3445.”This count remains on track so we are sticking with it.Near term, the decline from 1.3825 is in 5 waves but a correction back to 1.3714 is possible before the next leg lower.Still, favor the downside.
Strategy:Remain Bearish against 1.3824, targets 1.3600 and 1.3450
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0810techs3.gif
Commentary:We wrote yesterday that “the USDJPY has reversed after the high made yesterday at 119.83.Price is likely to continue lower (below 117.18).This decline may be a 5th wave so be wary of being too aggressive on a break below 117.18.”The strength of the decline from 118.25 suggests that the USDJPY is in a 3rd wave from 118.25.If this is correct, then the pair should continue lower until 116.29 before any kind of sizeable bounce takes place.This view is favored as long as price is below 118.25
Strategy: Remain bearish, move risk to 118.25 (from 119.83) targets 116.25
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0810techs4.gif
Commentary: We wrote yesterday that “the best count has the decline from 2.0461 as large wave C in an A-B-C from 2.0654 (same as EURUSD).The rally to 2.0397 was likely small wave ii of larger wave C.The bearish targets that we focused on a few days ago are back in focus now (1.9989 and 1.9697).”We are sticking with this outlook as long as price is below 2.0397.Near term resistance is at 2.0242.
Strategy: Remain bearish, against 2.0397, targets 2.0000 and 1.9700
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0810techs5.gif
Commentary:No change to the USDCHF as the pair has not moved much. “The structure is bearish as long as price is below 1.2165.But rally from 1.1815 is in 5 waves, which sets the stage for additional gains.Additional strength towards the 61.8% of 1.2165-1.1815 at 1.2032 may be needed before the next leg down.Remember that we are looking for a decline towards the measured objective at 1.1364 (the 161.8% extension of 1.2468-1.1960/1.2165).”
Strategy:Remain Bearish against 1.2165, target 1.1400
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0810techs6.gif
Commentary: We maintain that the USDCAD is in a rally leg that will push through 1.0699 (likely next week).Target are 1.0821 (100% extension of 1.0340-1.0699/1.0462) and 1.1043 (161.8% extension).The rally from 1.0462 is either larger wave C or 3.This view is favored as long as price is above 1.0462.
Strategy: Remain Bullish, move risk to 1.0462 (from 1.0340), targets 1.0821 and 1.1043
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0810techs7.gif
Commentary:We wrote yesterday to“look for a decline below .8443 towards the 100% extension of .8870-.8458/.8661 at .8249.”The leg lower is under way right now.Near term, coming under .8398 may complete an initial 5 wave decline from .8661 and give way to a larger corrective setback.It is also possible that this completes the entire A-B-C correction from .8870 (which is a larger 4th wave).In this case, a significant low will be put in place.There is obviously no evidence of that yet but it is possible.
Strategy: Move to flat (from bearish)
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0810techs8.gif
Commentary: We wrote yesterday that “weakness this morning (as in yesterday) gives scope to the thrust lower from the triangle.Look for a decline below .7531 towards chart support at .7452 (6/13 low).”Kiwi traded to .7399 this morning and the decline from the triangle is in 5 waves, indicating that the entire bear wave from .8108 is complete.As with Aussie though, there is obviously no evidence that the pair put in a bottom so we are watching for developments.
Strategy:Flat
*JTREND is a proprietary calculation that uses recent highs, lows and closes to determine the trend.
JTRENDLT is the longer term trend and uses the last 4 weeks of price data.
JTRENDST is the shorter term trend and uses the last 5 days of price data.
An example is below.
Blue bars denote bullish trend and red bars denote bearish trend.
The chart below is the EURUSD weekly chart.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0801techs9.gif
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http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0809techs2.gif
Commentary:The alternate bearish count should now be favored.This has the decline from 1.3838 as wave C of a larger A-B-C correction from 1.3852.Price is likely to continue lower towards the 100% of 1.3852-1.3608/1.3838 at 1.3595.The next bearish target is the 161.8% extension at 1.3445.The bearish bias is strong as long as price is below 1.3723.
Strategy:Bearish against 1.3824, targets 1.3600 and 1.3450
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0809techs3.gif
Commentary:We wrote yesterday that “larger wave 2 or B is expected to unfold from little if any below 117.18 and makes its way to the Fibo reversal zone of 119.83-121.47.The break above 119.09 indicates that the corrective wave is in its final leg towards 119.83-121.47.Wave c of the correction (from 117.95) would equal wave a (117.17-119.09) at 119.87.This level is reinforced by the 7/25 low at 119.79 (yellow circle).In summary, look for strong resistance just ahead of 120.00.”The USDJPY has reversed after the high made yesterday at 119.83.Price is likely to continue lower (below 117.18).This decline may be a 5th wave so be wary of being too aggressive on a break below 117.18.
Strategy: Bearish against 119.83, targets 117.18 and TBD
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0809techs4.gif
Commentary: We wrote yesterday that “the decline from 2.0461 is either wave b of a flat correction or wave C of a correction from 2.0651.Both cases are bullish near term and favor a rally through 2.0461.”We were clearly wrong here as price reversed prior to 2.0461 (high made at 2.0397).The best count has the decline from 2.0461 as large wave C in an A-B-C from 2.0654 (same as EURUSD).The rally to 2.0397 was likely small wave ii of larger wave C.The bearish targets that we focused on a few days ago are back in focus now (1.9989 and 1.9697).
Strategy: Flip back to bearish, against 2.0397, targets 2.0000 and 1.9700
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0809techs5.gif
Commentary:The structure is bearish as long as price is below 1.2165.But rally from 1.1815 is in 5 waves, which sets the stage for additional gains.Additional strength towards the 61.8% of 1.2165-1.1815 at 1.2032 may be needed before the next leg down.Remember that we are looking for a decline towards the measured objective at 1.1364 (the 161.8% extension of 1.2468-1.1960/1.2165)..
Strategy:Remain Bearish against 1.2165, target 1.1400
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0809techs6.gif
Commentary: We wrote yesterdat to “look for a thrust lower from a triangle to test either the 61.8% of 1.0340-1.0699 at 1.0477 or the 78.6% at 1.0417.”The thrust lower occurred and the USDCAD bottomed at 1.0462 yesterday.The pair should be in a rally leg that pushes through 1.0699 (likely next week).Target are 1.0821 (100% extension of 1.0340-1.0699/1.0462) and 1.1043 (161.8% extension).The rally from 1.0462 is either larger wave C or 3.
Strategy: Remain Bullish, against 1.0340, targets 1.0821 and 1.1043
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0809techs7.gif
Commentary:The Aussie has played out just as expected.We have maintained that “the decline from .8870 is the beginning of larger wave 4 within the 5 wave rally from .7268.Over the next several weeks, the AUDUSD could decline to the former 4th wave at .8162.Wave A of the decline ended at .8458 and wave B is underway now.Wave B is unfolding as a flat or triangle.If a flat, then price may top close to .8664 (50% of .8870-.8458).”The high this morning was at .8661 and the AUDUSD has reversed.Look for a decline below .8443 towards the 100% extension of .8870-.8458/.8661 at .8249.
Strategy: Bearish now, against .8661 targets .8249 and TBD
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0809techs8.gif
Commentary: We wrote of two scenarios yesterday.One had a flat unfolding, which means that a rally will occur towards the 38.2% of .8107-.7550 at .7762.The other was a triangle, which would lead to a thrust lower.We favored the flat scenario and were wrong in doing so as the weakness this morning gives scope to the thrust lower from the triangle.Look for a decline below .7531 towards chart support at .7452 (6/13 low).
Strategy:Flat
*JTREND is a proprietary calculation that uses recent highs, lows and closes to determine the trend.JTRENDLT is the longer term trend and uses the last 4 weeks of price data.JTRENDST is the shorter term trend and uses the last 5 days of price data.An example is below.Blue bars denote bullish trend and red bars denote bearish trend.The chart below is the EURUSD weekly chart.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0801techs9.gif
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http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/08-08-07t2.gif
Commentary:The EURUSD strucutre has confused us somewhat.The pair bounced just pips from below 1.3727.Technically, wave 4 should not intersect with wave 1, but in highly leveraged markets (such as FX), an intraday intersection is ok.With that in mind, wave 5 may be unfolding now, which will carry above 1.3838.A rally through 1.3838 would complete 5 waves and expectations would then be for a return to the 1.3720 level.Also, if wave 5 (from 1.3720) is to equal wave 1 (1.3608-1.3727), then a potential terminus for wave 5 is 1.3839 - very close to the wave 2 high of 1.3838.In summary, look higher but near term bullish potential is limited.
Strategy:Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/08-08-07t3.gif
Commentary:As we have focused on, “larger wave 2 or B is expected to unfold from little if any below 117.18 and makes its way to the Fibo reversal zone of 119.83-121.47.”The break above 119.09 indicates that the corrective wave is in its final leg towards 119.83-121.47.Wave c of the correction (from 117.95) would equal wave a (117.17-119.09) at 119.87.This level is reinforced by the 7/25 low at 119.79 (yellow circle).In summary, look for strong resistance just ahead of 120.00.
Strategy: Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/08-08-07t4.gif
Commentary: After spiking below 2.0179, Cable has embarked on an impressive rally.This leaves the decline from 2.0461 as either wave b of a flat correction or wave C of a correction from 2.0651.Both cases are bullish near term and favor a rally through 2.0461.We’ll wait until 2.0461 to be exceeded before deciding which count to favor.The alternate count is shown in red.
Strategy: Flip to bullish, against 2.0155, target above 2.0461
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/08-08-07t5.gif
Commentary:We maintain that the decline below 1.1877 “is the beginning of a thrust from a triangle.A measured objective for the end of the terminal thrust is 1.1364 (the 161.8% extension of 1.2468-1.1960/1.2165).The structure is bearish as long as price is below 1.2165.” Former support just below 1.2000 has held as resistance so far.A break above 1.2000 would destroy our confidence in the bearish bias.
Strategy:Remain Bearish against 1.2165, target 1.1400
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/08-08-07t6.gif
Commentary: There is no change to the medium term outlook that the USDCAD will rally through 1.0699 (as long as 1.0340 is intact).Near term though, it looks like another leg lower to complete a correction will take place.Look for a thrust lower from a triangle to test either the 61.8% of 1.0340-1.0699 at 1.0477 or the 78.6% at 1.0417.
Strategy: Bullish now, against 1.0340, target TBD
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/08-08-07t7.gif
Commentary:The decline from .8870 is the beginning of larger wave 4 within the 5 wave rally from .7268.Over the next several weeks, the AUDUSD could decline to the former 4th wave at .8162.Wave A of the decline ended at .8458 and wave B is underway now.Wave B is unfolding as a flat or triangle.If a flat, then price may top close to .8664 (50% of .8870-.8458).If a triangle is unfolding, then a range will persist between .8614 and .8444 for the next day or so.The flat scenario is shown on the chart.
Strategy: Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/08-08-07t8.gif
Commentary: We wrote of two scenarios yesterday.One had a flat unfolding, which means that a rally will occur towards the 38.2% of .8107-.7550 at .7762.The other was a triangle, which would lead to a thrust lower.Both scenarios remain possible, but the rejection of weakness yesterday at .7552 favors the former scenario of a flat unfolding.Also, we can now count a triangle in the B wave position of the flat.Look for wave C of the flat to work towards .7762 (and possible higher).
Strategy:Flip to bullish, against .7530, target 1 at .7760
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http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/08-07-07t2.gif
Commentary:The structure is bullish above 1.3727 as a wave 4 correction is most likely unfolding from 1.3834.A dip below 1.3780 would complete the correction and lead to a rally to a new high (above 1.3838).A drop under 1.3727 (red) would strongly indicate that a larger correction was unfolding and that price is headed below 1.3608.
Strategy:Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/08-07-07t3.gif
Commentary:We wrote yesterday that “the drop under 117.59 satisfies minimum expectations for a 5th wave in a 5 wave decline that began at 124.13.This intial 5 wave decline makes up larger wave 1 or A in the new bearish cycle.Larger wave 2 or B is expected to unfold from little if any below 117.18 and makes its way to the Fibo reversal zone of 119.83-121.47.”There is no change to the outlook.The USDJPY should continue higher until 119.83-121.47 before a top and reversal.
Strategy: Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/au7-5.gif
Commentary: We continue to look for “a drop to at least 1.9989 (100% extension of 2.0654-2.0181/2.0462).Potential support near this level is reinforced by the 61.8% of 1.9621-2.0654 at 2.0016.”Thebreak below 2.0279 instills confidence in the bearish outlook.
Strategy: Remain bearish, against 2.0462, target 2.0020
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/au7-6.gif
Commentary:We maintain that the decline below 1.1877 “is the beginning of a thrust from a triangle.A measured objective for the end of the terminal thrust is 1.1364 (the 161.8% extension of 1.2468-1.1960/1.2165).The structure is bearish as long as price is below 1.2165.”Former support at 1.1979 may be resistance.
Strategy:Remain Bearish against 1.2165, target 1.1400
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/au7-7.gif
Commentary: After briefly dipping below 1.0500 last night, the USDCAD has rallied to 1.0560.This may be the beginning of the rally that takes out 1.0699 and leads to much higher prices.The bottom of the reversal zone that we have focused on is the 61.8% of 1.0340-1.0699 at 1.0477.With the pair reversing very close to this level, there is no reason to alter the bullish outlook.A more complex correction could unfold but that would still most likely include a rally towards 1.0620 near term.
Strategy: Bullish now, against 1.0340, target TBD
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/au7-8.gif
Commentary:The decline from .8870 is the beginning of larger wave 4 within the 5 wave rally from .7268.Over the next several weeks, the AUDUSD could decline to the former 4th wave at .8162.Wave A of the decline ended at .8458 and wave B is underway now.Wave B is unfolding as a flat or triangle.If a flat, then price may top close to .8664 (50% of .8870-.8458).If a triangle is unfolding, then a range will persist between .8614 and .8444 for the next day or so.The flat scenario is shown on the chart.
Strategy: Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/au7-9.gif
Commentary: Kiwi is in a similar position as the AUDUSD.“A larger B wave or (2nd wave) is unfolding from .7553, which we expect to exceed .7731 before wave C (or 3rd wave) brings price much lower.The 38.2% of .8108-.7553 at .7765 is an objective for the end of the rally from .7531.”A triangle may be complete.If so, then the pair is likely to break down (below .7531) and test the 6/13 low at .7452 in coming days.A rally above .7731 indicates that the B wave is unfolding as a flat and that price will test the mentioned resistance.
Strategy:Bearish now, against .7662, target .7460
*JTREND is a proprietary calculation that uses recent highs, lows and closes to determine the trend.JTRENDLT is the longer term trend and uses the last 4 weeks of price data.JTRENDST is the shorter term trend and uses the last 5 days of price data.An example is below.Blue bars denote bullish trend and red bars denote bearish trend.The chart below is the EURUSD weekly chart.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0801techs9.gif
< Prev Next > [ Back ]
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/8-6-2tech.gif
Commentary:The complex correction idea that we proposed last week remains valid.We are treating the decline from 1.3852-1.3611 as wave A in a larger A-B-C correction.The rally from 1.3608 is wave B and the decline underway no is wave C and should come under 1.3608.A drop under 1.3727 would instill confidence in the bearish outlook.An alternate bullish count would be favored if the rally from 1.3608 traces out 5 waves (so far it is just 3).
Strategy:Remain bearish, against 1.3608, targets is under 1.3608
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/8-6-3tech.gif
Commentary:The drop under 117.59 satisfies minimum expectations for a 5th wave in a 5 wave decline that began at 124.13.This intial 5 wave decline makes up larger wave 1 or A in the new bearish cycle.Larger wave 2 or B is expected to unfold from little if any below 117.18 and makes its way to the Fibo reversal zone of 119.83-121.47.
Strategy: Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/8-6-4tech.gif
Commentary: On Friday, we wrote “look for a terminal thrust from this triangle into 2.0400/73 before a reversal.”The GBPUSD hit 2.0462 this morning to complete wave c of an a-b-c correction from 2.0181.Expectations now are for a drop to at least 1.9989 (100% extension of 2.0654-2.0181/2.0462).Potential support near this level is reinforced by the 61.8% of 1.9621-2.0654 at 2.0016.
Strategy: Remain bearish, against 2.0654, target 2.0020
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/8-6-5tech.gif
Commentary:The long term head and shoulders reversal is no longer intact as the USDCHF has dropped under the December 2006 low of 1.1877.The break lower suggests that the decline is the beginning of a thrust from a triangle.A measured objective for the end of the terminal thrust is 1.1364 (the 161.8% extension of 1.2468-1.1960/1.2165).The structure is bearish as long as price is below 1.2165.
Strategy:Bearish now, against 1.2165, target 1.1400
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/8-6-6tech.gif
Commentary:There is no change to the outlook that calls for a reversal.“The rally from 1.0340 is clearly impulsive, signaling that the trend has changed from down to up (and at least one more 5 wave rally will occur).Wave c of the a-b-c correction from 1.0699 is unfolding now and should bottom in the 1.0477-1.0562 zone.This is the 61.8% to 38.2% of 1.0340-1.0699.”It is possible that the pair chops lower to test the bottom of the zone at 1.0477 (alternate arrows in red).1.0340 is the line in the sand.
Strategy: Bullish now, against 1.0340, target TBD
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/8-6-7tech.gif
Commentary:The decline from .8870 is the beginning of larger wave 4 within the 5 wave rally from .7268.Over the next several weeks, the AUDUSD could decline to the former 4th wave at .8162.Wave A of the decline ended at .8458 and wave B is underway now.Wave B is unfolding as a flat and may top close to .8664 (50% of .8870-.8458).It is also possible that the larger 4th wave is complete and that the rally underway now is larger wave 5.Either case is near term bullish until at least a rally above .8614.The form of the rally will tell us what to expect in the future.
Strategy: Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/8-6-8tech.gif
Commentary: Kiwi is in a similar position.“A larger B wave or (2nd wave) is unfolding from .7553, which we expect to exceed .7731 before wave C (or 3rd wave) brings price much lower.The 38.2% of .8108-.7553 at .7765 is an objective for the end of the rally from .7531.”Near term, Kiwi is bullish against .7531 as the pattern unfolding from .7553 may be an inverse head and shoulders.
Strategy:Bullish now, against .7531, target .7750
*JTREND is a proprietary calculation that uses recent highs, lows and closes to determine the trend.JTRENDLT is the longer term trend and uses the last 4 weeks of price data.JTRENDST is the shorter term trend and uses the last 5 days of price data.An example is below.Blue bars denote bullish trend and red bars denote bearish trend.The chart below is the EURUSD weekly chart.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0801techs9.gif
< Prev Next > [ Back ]
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0803techs2.gif
Commentary:As we wrote yesterday,“it seems likely that a more complex correction is playing out from 1.3608.The rally from 1.3608 to 1.3727 is wave a and the decline from there is wave b.A rally in wave c towards 1.3750 is expected before a reveral and drop under 1.3608.This places the dominant 3 wave decline from 1.3852 as larger wave A and everything that has followed as larger wave B.”This seems to be playing out, so we are sticking with it.
Strategy:Remain bullish, against 1.3608, targets 1.3750 (then flip to short against 1.3852)
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0803techs3.gif
Commentary:The USDJPY is unfolding as expected.We wrote yesterday that “we are execting the USDJPY to gain correctively until 119.50 before another leg lower brings price under 117.60.”Price stalled at 119.38 yesterday and the 200 day SMA is at 119.59, which reinforces resistance at that level.The drop under the 200 day SMA suggests a longer term reversal is underway.
Strategy: Move to flat (previously bearish)…look to get bearish close to 119.50 (against 120.73)
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0803techs4.gif
Commentary: The GBPUSD is also unfolding as expected.“We have treated the rally from the 7/29 low at 2.0181 as wave B in a large A-B-C correction from 2.0654 (same pattern as the EURUSD).”We wrote yesterday about the triangle that had formed from the 8/1 high and mentioned that we were expecting a terminal thrust towards the 2.0400/73 level.2.0400 is the 100% extension of 2.0181-2.0378/1.0203 and 2.0473 is the 61.8% of 2.0654-2.0181.Price has satisfied minimum expectations for the thrust from that triangle but yet another triangle has formed overnight.Look for a terminal thrust from this triangle (red lines) into 2.0400/73 before a reversal.
Strategy: Move to flat (from bullish), look to short between 2.0400/73 against 2.0654, targeting a drop under 2.0181
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0803techs5.gif
Commentary:The wedge idea that we have focused on in recent days seems to be working.“The decline from 1.2165 could be a diagonal (wedge) in the B position in a large A-B-C correction from 1.1960.This would suggest that wave C will exceed 1.2165 before the next leg lower occurs.”Exceeding 1.2165 satisfies minimum expectations.The 50% of 1.2468-1.1960 at 1.2214 is a potential reversal point.We are least confident in the USDCHF pattern and see better opportunities elsewhere.
Strategy:Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0803techs6.gif
Commentary:USDCAD may the opportunity of the month.“The rally from 1.0340 is clearly impulsive, signaling that the trend has changed from down to up.Wave c of the a-b-c correction from 1.0699 is unfolding now and should bottom in the 1.0477-1.0562 zone.This is the 61.8% to 38.2% of 1.0340-1.0699.”The USDCAD is finding support in this reversal zone and the rally from 1.0508 may unfold impulsively.It is possible that the pair chops lower to test the bottom of the zone at 1.0477 (alternate arrows in red).Regardless, long USDCAD is one of the best opportunities igoing forward.1.0340 is the line in the sand.
Strategy: Bullish now, against 1.0340, target TBD
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0803techs7.gif
Commentary:No change to the Aussie.“Bigger picture, the decline from .8870 is the beginning of larger wave 4 within the 5 wave rally from .7268.Over the next several weeks, the AUDUSD could decline to the former 4th wave at .8162.Wave A of the decline ended at .8458 and wave B is underway now.Wave B is unfolding as a flat.The last leg of the flat is unfolding now and we are looking for an extension to above .8615 before wave C of the correction brings price much lower.A potential reversal point is .8664 (50% of .8870-.8458).
Strategy: Look to get bearish in .8664/.8713 zone, against .8870, targeting below .8443
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0803techs8.gif
Commentary: “NZDUSD is in the exact same position as the AUDUSD.A larger B wave or (2nd wave) is unfolding from .7553, which we expect to exceed .7731 before wave C (or 3rd wave) brings price much lower.The 38.2% of .8108-.7553 at .7765 is an objective for the end of the rally from .7531.”
Strategy:Flat
*JTREND is a proprietary calculation that uses recent highs, lows and closes to determine the trend.JTRENDLT is the longer term trend and uses the last 4 weeks of price data.JTRENDST is the shorter term trend and uses the last 5 days of price data.An example is below.Blue bars denote bullish trend and red bars denote bearish trend.The chart below is the EURUSD weekly chart.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0801techs9.gif
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http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/08-02-07t2.gif
Commentary:Near term, the EURUSD has traded in a choppy manner, which may be a triangle.A thrust below 1.3637 is possible (see alternate arrow arrangement in red) before the expected move higher above 1.3727.It seems more likely now that a more complex correction (much like GBPUSD) is playing out from 1.3608.The rally from 1.3608 to 1.3727 is wave a and the decline from there is wave b.A rally in wave c towards 1.3750 is expected before a reveral and drop under 1.3608.This places the dominant 3 wave decline from 1.3852 as larger wave A and everything that has followed as larger wave B.
Strategy:Remain bullish, against 1.3608, targets 1.3750 (then flip to short against 1.3852)
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/08-02-07t3.gif
Commentary:The USDJPY is unfolding as expected.We wrote yesterday that “we are execting the USDJPY to gain correctively until 119.50 before another leg lower brings price under 117.60.”Expect choppy action in the USDJPY for the rest of the week as the correction is in its middle stages.The 200 day SMA is at 119.59, which reinforces resistance at that level.The drop under the 200 day SMA suggests a longer term reversal is underway.
Strategy: Move to flat (previously bearish)…look to get bearish close to 119.50 (against 120.73)
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/08-02-07t4.gif
Commentary: The GBPUSD is also unfolding as expected.We are treating the rally from the 7/29 low at 2.0181 as wave B in a large A-B-C correction from 2.0654 (same pattern as the EURUSD).A triangle has formed from yesterday’s high (2.0349) and expectations are for a terminal thrust higher towards 2.0400/73.2.0400 is the 100% extension of 2.0181-2.0378/1.0203 and 2.0473 is the 61.8% of 2.0654-2.0181.In summary we are looking for a rally to 2.0400/73 before a top and reversal that brings price under 2.0181.
Strategy: Remain bullish against 2.0181, target 2.0400 (flip to short between 2.0400/73 against 2.0654, targeting a drop under 2.0181)
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/08-02-07t5.gif
Commentary:The USDCHF remains choppy but the breakout from the wedge idea that we proposed yesterday seems correct.“The decline from 1.2165 could be a diagonal (wedge) in the B position in a large A-B-C correction from 1.1960.This would suggest that wave C will exceed 1.2165 before the next leg lower occurs.”Exceeding 1.2165 satisfies minimum expectations.The 50% of 1.2468-1.1960 at 1.2214 is a potential reversal point.
Strategy:Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/08-02-07t6.gif
Commentary:We wrote yesterday that “we are looking for a corrective setback in the USDCAD to unfold.The rally from 1.0340 is clearly impulsive, signaling that the trend has changed from down to up.Wave c of the a-b-c correction from 1.0699 is unfolding now and should bottom in the 1.0477-1.0562 zone.This is the 61.8% to 38.2% of 1.0340-1.0699.”The USDCAD came into the reversal zone and found a low yesterday at 1.0551.Whether or not this is ‘the’ low of wave 2 remains to be seen.It is possible that the pair chops lower to test 1.0523 or the bottom of the zone at 1.0477 (alternate arrows in red).Regardless, long USDCAD is one of the best opportunities in the coming weeks.
Strategy: Bullish now, against 1.0340, target TBD
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/08-02-07t7.gif
Commentary:No change to the Aussie.“Bigger picture, the decline from .8870 is the beginning of larger wave 4 within the 5 wave rally from .7268.Over the next several weeks, the AUDUSD could decline to the former 4th wave at .8162.Wave A of the decline ended at .8458 and wave B is underway now.Wave B is unfolding as a flat.The last leg of the flat is unfolding now and could extend to above .8615 before wave C of the correction brings price much lower.The limit for wave B of this correction is .8399 (138.2% of .8458-.8614).A drop under there suggests that something more bearish is unfolding.”
Strategy: Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/08-02-07t8.gif
Commentary: No change to the Kiwi .“NZDUSD is in the exact same position as the AUDUSD.A larger B wave or (2nd wave) is unfolding from .7553, which we expect to exceed .7731 before wave C (or 3rd wave) brings price much lower.The 38.2% of .8108-.7553 at .7765 is an objective for the end of the rally from .7531.”
Strategy:Flat
*JTREND is a proprietary calculation that uses recent highs, lows and closes to determine the trend.JTRENDLT is the longer term trend and uses the last 4 weeks of price data.JTRENDST is the shorter term trend and uses the last 5 days of price data.An example is below.Blue bars denote bullish trend and red bars denote bearish trend.The chart below is the EURUSD weekly chart.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0801techs9.gif
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http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0801techs2.gif
Commentary:The EURUSD has declined but 1.3608 remains intact and the dominant pattern remains the 3 wave corrective decline from 1.3852-1.3608.The decline from 1.3727 has stopped in the vicinity of the 61.8% of 1.3608-1.3727 (1.3654).A break above 1.3727 exposes the 100% of 1.3608-1.3727/1.3637 at 1.3755.If 1.3608 gives way, then the bullish structure is no longer intact.
Strategy:Remain bullish, against 1.3608, targets 1.3755 and 1.3850
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0801techs3.gif
Commentary:We cited 117.60 yesterday and the USDJPY declined to this level this morning in what was likely the completion of a 5th wave (v).We are expecting larger wave 4 to bring price back close to 119.50 (7/31 high).In summary, we are execting the USDJPY to gain correctively until 119.50 before another leg lower brings price under 117.60.A break under 117.59 exposes 115.14.
Strategy: Move to flat (previously bearish)…look to get bearish close to 119.50
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0801techs4.gif
Commentary: The near term pattern in Cable has cleared up and we think it likely that price action from the 7/29 low at 2.0181 is part of wave B in a large A-B-C correction from 2.0654.The B wave could play out as a triangle or a flat.If a flat, then price is likely to test 2.0399/2.0418 in the next day or two (flat scenario is shown on the chart today).This is the 100% extension of 2.0181-2.0378 / 2.0203 / 50% of 2.0654-2.0181.Coming under 2.0181 negates this scenario and exposes 2.0056.
Strategy: Flip to bullish (previously bearish from 2.0327) against 2.0181, target 2.0400
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0801techs5.gif
Commentary:As has been the case, we do not have a good read on the USDCHF.The pair has traded in a diabolical whipsaw fashion for much of the summer.The long term inverse head and shoulders (bullish) pattern that we have mentioned remains intact as long as price is above 1.1877.The decline from 1.2165 could be a diagonal (wedge) in the B position in a large A-B-C correction from 1.1960.This would suggest that wave C will exceed 1.2165 before the next leg lower occurs.This scenario is shown on the chart.
Strategy:Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0801techs6.gif
Commentary:We wrote yesterday that “we are looking for a corrective setback in the USDCAD to unfold.The rally from 1.0340 is clearly impulsive, signaling that the trend has changed from down to up.” Wave c of the a-b-c correction from 1.0699 is unfolding now and should bottom in the 1.0477-1.0562 zone.This is the 61.8% to 38.2% of 1.0340-1.0699.
Strategy: Bullish now, against 1.0340, target TBD
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0801techs7.gif
Commentary:Bigger picture, the decline from .8870 is the beginning of larger wave 4 within the 5 wave rally from .7268.Over the next several weeks, the AUDUSD could decline to the former 4th wave at .8162.Wave A of the decline ended at .8458 and wave B is underway now.Wave B is unfolding as a flat.The last leg of the flat is unfolding now and could extend to above .8615 before wave C of the correction brings price much lower.The limit for wave B of this correction is .8399 (138.2% of .8458-.8614).A drop under there suggests that something more bearish is unfolding.
Strategy: Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0801techs8.gif
Commentary: NZDUSD is in the exact same position as the AUDUSD.A larger B wave or (2nd wave) is unfolding from .7553, which we expect to exceed .7731 before wave C (or 3rd wave) brings price much lower.The 38.2% of .8108-.7553 at .7765 is an objective for the end of the rally from .7531.
Strategy:Flat
*JTREND is a proprietary calculation that uses recent highs, lows and closes to determine the trend.JTRENDLT is the longer term trend and uses the last 4 weeks of price data.JTRENDST is the shorter term trend and uses the last 5 days of price data.An example is below.Blue bars denote bullish trend and red bars denote bearish trend.The chart below is the EURUSD weekly chart.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/08/dailyfx_reports/Techs/0801techs9.gif
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http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Techs/0731techs2.gif
Commentary:We wrote yesterday that “very short term charts (15 min) show that the rally from 1.3608 would be in 5 waves on a push through 1.3679.Therefore, we are expecting EURUSD strength for the next day.Potential resistance is at the 38.2% of 1.3852-1.3608 at 1.3701 and the 61.8% at 1.3759.”Our near term view remains the same.That is, we are looking for weakness from 1.3627 to prove corrective and find support near 1.3658 before a stronger rally comes close to testing 1.3852.Price must remain above 1.3608 in order for this bullish scenario to play out.
Strategy:Look to get bullish close to 1.3658, against 1.3608, target 1.3852
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Techs/0731techs3.gif
Commentary:We continue to favor the downside in the medium term.Very short term, the USDJPY may test the 38.2% of 122.43-118.01 at 119.70.The 7/25 low at 119.81 defends this level.Keep an eye on the support line, drawn off of the May 2006 and March 2007 lows.A sustained break of this level would be a strong signal that the USDJPY is headed much lower, towards 117.60 and potentially 115.14.
Strategy: Sell bounce to 119.30/80, against 120.97, target 1 is 117.60
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Techs/0731techs4.gif
Commentary: There is no change to our outlook for Cable as things are playing out as expected so far.“The decline from 2.0561 has reached the 161.8% extension of 2.0654-2.0424/2.0561 at 2.0181, which makes it likely that the decline from 2.0654 will prove to be impulsive (5 waves) rather than a corrective 3 waves.The rally from the low is most likely a 4th wave correction.We are looking for this rally to end near the 38.2% of 2.0561-2.0181 at 2.0327.”The high on the day so far is 2.0335 so we are looking for the pair to roll over now and head below 2.0181.Price needs to remain below 2.0423 in order for us to remain near term bears.
Strategy: Move to flat, get bearish near 2.0327, against 2.0423, target 1 at 2.0181
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Techs/0731techs5.gif
Commentary:The USDCHF has by far been the most difficult pair to analyze over the past few months.This usually means that the pair is in a correction.The long term inverse head and shoulders (bullish) pattern that we have mentioned remains intact as long as price is above 1.1877.Near term, the decline from 1.2165 is in just 3 waves.This could be a B wave in a larger correction from 1.1960.If so, then price should continue higher towards the confluence of the 50% of 1.2468-1.1960 / 100% extension of 1.1960-1.2165/1.2005 at 1.2211/14.The 7/6 high is also at 1.2232.This is the clearest count that we see at the moment.
Strategy:Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Techs/0731techs6.gif
Commentary:We wrote yesterday that “we are looking for a corrective setback in the USDCAD to unfold.The rally from 1.0340 is clearly impulsive, signaling that the trend has changed from down to up.”That corrective setback is unfolding now and should bottom in the 1.0477-1.0562 zone.This is the 61.8% to 38.2% of 1.0340-1.0699.The low of the former 4th wave is at 1.0523 and is in the middle of this zone.
Strategy: Bullish now, against 1.0340, target TBD
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Techs/0731techs7.gif
Commentary:We wrote yesterday that “we are treating the decline as the beginning of larger wave 4 in the 5 wave rally from .7268.Over the next seversal weeks, the AUDUSD could decline to the former 4th wave at .8162.However, since we are viewing this as a larger correction, trading is likely to prove choppy over the next several weeks (but chop lower).It is possible to count 5 waves down with an extended 3rd wave down from .8870 (which is likely wave A of the large correction), thus near term risk is to the upside towards .8545 and .8649.”The AUDUSD is testing .8600.A push through .8600 would give scope to a test of the 61.8% of .8870-.8458 at .8713.If a large flat is unfolding, then the AUDUSD will likely test the high at .8870.There will be an opportunity to get short for wave C of this correction, but the pattern is not clear enough to act upon yet.
Strategy: Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Techs/0731techs8.gif
Commentary: We wrote yesterday that “a clear 5 waves down sets the stage for a longer term decline but immediate risk is to the upside towards .7684 and potentially .7873.We are expecting the rally to unfold correctively and will be looking for an opportunity to get bearish on the bounce.”So far, there is no evidence that the NZDUSD is ready to roll over so near term risk remains to the upside.Watch for a reversal in the Fibonacci zone of .7765-.7896.
Strategy:Flat
*JTREND is a proprietary calculation that uses recent highs, lows and closes to determine the trend.JTRENDLT is the longer term trend and uses the last 4 weeks of price data.JTRENDST is the shorter term trend and uses the last 5 days of price data.An example is below.Blue bars denote bullish trend and red bars denote bearish trend.The chart below is the EURUSD weekly chart.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Techs/0702tech9.gif
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http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Techs/0730techs2.gif
Commentary:We wrote Friday that “this decline should extend to at least the 100% extension of 1.3852-1.3693 to 1.3611, but bearish potential is much larger.”The decline ended at 1.3608 last night and since the decline is only in 3 waves so far, we have to respect the larger bullish trend.Very short term charts (15 min) show that the rally from 1.3608 would be in 5 waves on a push through 1.3679.Therefore, we are expecting EURUSD strength for the next day.Potential resistance is at the 38.2% of 1.3852-1.3608 at 1.3701 and the 61.8% at 1.3759.
Strategy:Move to flat (previously bearish)
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Techs/0730techs3.gif
Commentary:We wrote last week that “we expect the support line to be broken and for the USDJPY to continue lower next week.”The support line that were referring to was the line drawn off of the May 2006 and March 2007 lows.The pair did not close below the line Friday but is below the line right now.The next level of potential support is the 4/19 low at 117.60.119.30-119.80 is resistance.
Strategy: Sell bounce to 119.30/80, target 117.60
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Techs/0730techs4.gif
Commentary: The decline from 2.0561 has reached the 161.8% extension of 2.0654-2.0424/2.0561 at 2.0181, which makes it likely that the decline from 2.0654 will prove to be impulsive (5 waves) rather than a corrective 3 waves.The rally from the low is most likely a 4th wave correction.We are looking for this rally to end near the 38.2% of 2.0561-2.0181 at 2.0327.Immediate risk is to the upside towards this level.
Strategy: Move to flat, get bearish near 2.0327, target TBD
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Techs/0730techs5.gif
Commentary:The possibility remains that an inverse head and shoulders pattern has been unfolding since May 2006.The short term pattern remain unclear but the rally from 1.1960 ended at the 38.2% of 1.2468-1.1960 at 1.2154 last Wednesday.Without any signs of an impulsive rally, we’ll continue to look for a break below 1.1960 and potentially 1.1877.
Strategy:Bearish against 1.2165, target below 1.1877
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Techs/0730techs6.gif
Commentary:We are looking for a corrective setback in the USDCAD to unfold.The rally from 1.0340 is clearly impulsive, signaling that the trend has changed from down to up.We have focused in recent weeks on the weekly chart to show that a long term bottom was close at hand.1.0523 should be solid support.1.0756 is the next level of chart resistance.
Strategy: Bullish now, against 1.0340, target TBD
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Techs/0730techs7.gif
Commentary:As mentioned Friday, we are treating the decline as the beginning of larger wave 4 in the 5 wave rally from .7268.Over the next seversal weeks, the AUDUSD could decline to the former 4th wave at .8162.However, since we are viewing this as a larger correction, trading is likely to prove choppy over the next several weeks (but chop lower).It is possible to count 5 waves down with an extended 3rd wave down from .8870, thus near term risk is to the upside towards .8545 and .8649.
Strategy: Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Techs/0730techs8.gif
Commentary: The short term pattern in the Kiwi is the same as the Aussie.A clear 5 waves down sets the stage for a longer term decline but immediate risk is to the upside towards .7684 and potentially .7873.We are expecting the rally to unfold correctively and will be looking for an opportunity to get bearish on the bounce.
Strategy:Flat
*JTREND is a proprietary calculation that uses recent highs, lows and closes to determine the trend.JTRENDLT is the longer term trend and uses the last 4 weeks of price data.JTRENDST is the shorter term trend and uses the last 5 days of price data.An example is below.Blue bars denote bullish trend and red bars denote bearish trend.The chart below is the EURUSD weekly chart.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Techs/0702tech9.gif
< Prev Next > [ Back ]
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Daily_Techs/07-27-07-2.gif
Commentary:We wrote yesterday that “a drop under 1.3696 would complete a 5 wave decline from 1.3852.A retrace in larger wave 2 or b would follow and that would offer an opportunity to get short for a much bigger decline.”This is exactly what happened as the EURUSD dropped below 1.3696 to hit 1.3693.The rebound from there was a correction to 1.3770 and the bigger decline is underway now.This decline should extend to at least the 100% extension of 1.3852-1.3693 to 1.3611, but bearish potential is much larger.
Strategy:Bearish now, against 1.3770, target TBD
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Daily_Techs/07-27-07-3.gif
Commentary:The decline in the USDJPY has been nothing short of impessive.The pair has found interim support from the line drawn off of the May 2006 and March 2007 lows.Dialy RSI is in oversold territory as well.It is interesting to note that a dip into oversold or overbought territory often signals that the pair is in the middle of its move.As such, we expect the support line to be broken and for the USDJPY to continue lower next week.Former support at 119.80 is now resistance.
Strategy: Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Daily_Techs/07-27-07-4.gif
Commentary: We wrote yesterday that “the idea that Cable is tracing out a larger 4th wave remains possible, which means that this down leg could be just the first leg of a larger correction.The line in the sand for the larger bullish picture is 2.0203.However, given the EXTREME sentiment (speculative positioning extremely long), Cable could very well continue to drop fast.”Althought price has yet to breach 2.0203, the drop below the line drawn off of the 6/14 and 7/6 lows instills confidence in the near term bearish strucutre.2.0203 is the next support level (this is also the 161.8% extension of 2.0654-2.0424/2.0561.The intraday reaction high at 2.0391 should offer strong resistance.
Strategy: Move to flat, get bearish near 2.0391, target TBD
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Daily_Techs/07-27-07-5.gif
Commentary:There is no change in our longer term outlook as the short term strucutre is unclear.The USDCHF short term strucutre is also unclear therefore we are taking a look at the weekly.The 14 month inverse head and shoulders pattern remains in place as long as price is above 1.1877.An inverse head and shoulders is a derivation of a triple bottom.The inverse head and shoulders pattern is not confirmed until a break of the neckline but the proximity of 1.1877 skews reward to risk in favor of bulls.
Strategy:Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Daily_Techs/07-27-07-6.gif
Commentary:We wrote yesterday that “the rally above 1.0495 breaks the sequence of lower highs and is the signal that we were looking for the get bullish.”Now we also have a clear 5 wave rally from 1.0340.A corrective setback should find strong support between 1.0402 and 1.0523.This would present an opportunity for bulls to act.
Strategy: Bullish now, against 1.0340, target TBD
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Daily_Techs/07-27-07-7.gif
Commentary:We wrote yesterday that “a drop under .8786 would indicate additional bearish potential as that would throw a potential ending diagonal formation out the window.This may be the beginning of a large wave 4 decline that declines to at least .8707.”The AUSUSD has dropped off of a cliff and traded close to .8550 this morning.We are treating the decline as the beginning of larger wave 4 in the 5 wave rally from .7268.Over the next seversal weeks, the AUDUSD could decline to the former 4th wave at .8162.However, since we are viewing this as a larger correction, then trading is likely to prove choppy over the next several weeks (but chop lower).
Strategy: Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Daily_Techs/07-27-07-8.gif
Commentary: For the first time in a while, we have a clear pattern to work with.The decline from .8108 is in a clear 5 waves and is either larger wave 1 or A of either a 1-2-3-4-5 or A-B-C decline.A corrective rally should unfold now, and intial resistance is at .7873.We will watch the form of the decline and look for an opportunity to get bearish.
Strategy:Flat
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http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Techs/0726techs2.gif
Commentary:Looking at the hourly, a drop under 1.3696 would complete a 5 wave decline from 1.3852.A retrace in larger wave 2 or b would follow and that would offer an opportunity to get short for a much bigger decline.Sometimes, a 5 down can signal the end of a correction (c wave), but in this case we believe that the 5 down signals the beginning of a larger decline because an ending diagonal ended at 1.3852, which means that the decline is from the top and most likely the beginning of the decline - not the end.
Strategy:Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Techs/0726techs3.gif
Commentary:We wrote yesterday that “From an EW standpoint, a double zigzag may be unfolding from 124.13.The first a-b-c decline (wave W) is from 124.13-120.97.Wave X is from 120.97-122.60 and wave Y is underway now (will either be an a-b-c or i-ii-iii-iv-v).Waves W and Y would be equal at 119.45, very close to the mentioned 50% fibo at 116.64 and 1 pip away from the 5/11 low at 119.46.We are looking for a decline to this level.”The USDJPY just dropped to 119.62, very close to our objective, so be wary of chasing it lower.A bounce could test resistance at 120.74.
Strategy: Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Techs/0726techs4.gif
Commentary: The idea that Cable is tracing out a larger 4th wave remains possible, which means that this down leg could be just the first leg of a larger correction.The line in the sand for the larger bullish picture is 2.0203.However, given the EXTREME sentiment (speculative positioning extremely long), Cable could very well continue to drop fast.The pair is coming up on potential support from a line drawn off of the 6/14 and 7/6 lows.A drop below exposes the 61.8% to 50% zone of 2.0056-2.0654 at 2.0284-2.0355.The short term structure is unclear.But, given the high correlation between EURUSD and GBPUSD and given that the EURUSD structure is bearish, a bearish stance on Cable is reasonable.
Strategy: Bullish against 2.0203, targeting 2.1000 (but monitoring closely)
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Techs/0726techs5.gif
Commentary:The USDCHF short term strucutre is also unclear therefore we are taking a look at the weekly.The 14 month inverse head and shoulders pattern remains in place as long as price is above 1.1877.An inverse head and shoulders is a derivation of a triple bottom.The inverse head and shoulders pattern is not confirmed until a break of the neckline but the proximity of 1.1877 skews reward to risk in favor of bulls.
Strategy:Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Techs/0726techs6.gif
Commentary:The USDCAD may be in a small wave 3 higher from 1.0340.We have continued to focus on the potential for a significant bottom to be established in the USDCAD due to the weekly wave structure and COT report (same as GBP).The rally above 1.0495 breaks the sequence of lower highs and is the signal that we were looking for the get bullish.
Strategy: Bullish now, against 1.0340, target TBD
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Techs/0726techs7.gif
Commentary:We wrote yesterday that “risk of a reversal is high as evidenced also by the RSI divergence (on multiple time frames).”The AUDUSD has reversed and a drop under .8786 would indicate additional bearish potential as that would throw a potential ending diagonal formation out the window.This may be the beginning of a large wave 4 decline that declines to at least .8707.
Strategy: Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Techs/0726techs8.gif
Commentary: The form of the decline remains corrective but a drop under .7879 (21 day SMA at .7874) would make overlapping waves and indicate that a larger correction (or diagonal) was underway.Daily RSI has dropped under 70 on the daily, which signals additional bearish potential.
Strategy:Move to flat (from bearish)
*JTREND is a proprietary calculation that uses recent highs, lows and closes to determine the trend.JTRENDLT is the longer term trend and uses the last 4 weeks of price data.JTRENDST is the shorter term trend and uses the last 5 days of price data.An example is below.Blue bars denote bullish trend and red bars denote bearish trend.The chart below is the EURUSD weekly chart.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Techs/0716techs9.gif
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http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Daily_Techs/Technicals_07-25-2007_b.gif
Commentary:We wrote yesterday that “the two near term moves that we view as having the highest probabilities are, 1.) that an ending diagonal is unfolding from 1.3752…the EURUSD will spike through the 1.3843 before reversing and trading to at least 1.3752.”The EURUSD spiked to 1.3852 beforfe reversing and trading to 1.3724 this morning.Price has fully retraced the ending diagonal and found support, which gives scope to a continuation of the uptrend in wave 5.
Strategy:Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Daily_Techs/Technicals_07-25-2007_c.gif
Commentary:We wrote yesterday that “From an EW standpoint, a double zigzag may be unfolding from 124.13.The first a-b-c decline (wave W) is from 124.13-120.97.Wave X is from 120.97-122.60 and wave Y is underway now (will either be an a-b-c or i-ii-iii-iv-v).Waves W and Y would be equal at 119.45, very close to the mentioned 50% fibo at 116.64 and 1 pip away from the 5/11 low at 119.46.We are looking for a decline to this level.”The USDJPY was close to the measured objective, hitting 119.81 this morning.There is no sign yet that a bottom is in place so we are looking for price to continue lower towards 119.45.
Strategy: Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Daily_Techs/Technicals_07-25-2007_d.gif
Commentary: Our highest probability count has Cable tracing out a 4th wave correction within the larger 5 wave rally from 1.9621.We are looking for a bit more weakness, towards the former 4th wave (one lesser degree), at 2.0459.Parallel channel support is close right at this level as well (shown on chart).The bigger picture is bullish as long as price is above 2.0203.
Strategy: Currently bearish, look to flip close to trendline on chart above, against 2.0203, targeting 2.1000
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Daily_Techs/Technicals_07-25-2007_e.gif
Commentary:The USDCHF broke through 1.2079 to test 1.2142 this morning.The structure of the decline from 1.2476 is not completely clear but potential resistance is at the 38.2% of 1.2476-1.1960 at 1.2157.A complex correction appears to be playing out from 1.1960.The final leg of the correction (from 1.2011) needs a push above 1.2142 before we can consider the advance complete.
Strategy:Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Daily_Techs/Technicals_07-25-2007_f.gif
Commentary:The USDCAD broke below 1.0400, proving us wrong in the process.One more low, below 1.0339, may be in ordet before the USDCAD makes another attempt at a reveral.We say that because the rally from the low is corrective so far and could be a 4th wave.Once we see a clear 5 wave rally, we will look to get bullish.
Strategy: Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Daily_Techs/Technicals_07-25-2007_g.gif
Commentary:The AUDUSD is little changed as the rally from .8707 is choppy (possibly a diagonal), which warns that upside momentum is waning..8840 has been a measured objective and the high this morning is at .8870.Risk of a reversal is high as evidenced also by the RSI divergence (on multiple time frames).
Strategy: Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Daily_Techs/Technicals_07-25-2007_h.gif
Commentary: We have been looking for a decline and wrote yesterday that “the form still suggests that any decline will be corrective and that Kiwi is headed higher..8247, the 161.8% of .7714-.7940/.7882 is a new target.”We still look for Kiwi to advance towards this level over the next few months but a correction is currently playing out.A c wave should come under .7996 in order to complete the correction.Wave c would equal wave a at .7968.
Strategy:Bearish now, against .8107, target .7968
*JTREND is a proprietary calculation that uses recent highs, lows and closes to determine the trend.JTRENDLT is the longer term trend and uses the last 4 weeks of price data.JTRENDST is the shorter term trend and uses the last 5 days of price data.An example is below.Blue bars denote bullish trend and red bars denote bearish trend.The chart below is the EURUSD weekly chart.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Daily_Techs/Technicals_07-25-2007_i.gif
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http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Daily_Techs/07-24-07tech2.gif
Commentary:The EURUSD remains below 1.3843 (yesterday’s high) before pulling back to the 1.3800 figure.The two near term moves that we view as having the highest probabilities are, 1.) that an ending diagonal is unfolding from 1.3752 and 2.) that a flat is unfolding from 1.3752.In the first instance, the EURUSD will spike through the 1.3843 before reversing and trading to at least 1.3752.In the second instance, the pair will continue lower from current levels and initial support is just below 1.3752.We are showing the flat scenario on the chart.
Strategy:Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Daily_Techs/07-24-07tech3.gif
Commentary:We wrote yesterday that “intraday charts show a head and shoulders pattern forming from the beginning of June as well.The pattern is confirmed on a break below 120.75.The next level of support would be the 50% fibo of 115.14-124.13 at 119.64.”The USDJPY broke below the neckline and is currently testing the line as resistance.From an EW standpoint, a double zigzag may be unfolding from 124.13.The first a-b-c decline (wave W) is from 124.13-120.97.Wave X is from 120.97-122.60 and wave Y is underway now (will either be an a-b-c or i-ii-iii-iv-v).Waves W and Y would be equal at 119.45, very close to the mentioned 50% fibo at 116.64 and 1 pip away from the 5/11 low at 119.46.We are looking for a decline to this level.
Strategy: Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Daily_Techs/07-24-07tech4.gif
Commentary: The rally from 2.0056 is in its 5th wave and as such, we are looking for a return to the former 4th wave at 2.0459 once this 5th wave is complete.Of course, there is no evidence that wave 5 is complete yet.The pair continues to press against the resistance line drawn off of the June and July highs and RSI on the daily has been overbought since July 10.A drop below the line drawn off of the 7/6 and 7/13 lows would strongly suggest that a near term top is in place.That line is at 2.0576 today and in red on the chart above. Price above this line keeps the structure bullish.
Strategy: Sell break of 7/6-7/13 line - currently at 2.0576 (in red on chart), against swing high (currently 2.0654), target 1 2.0459
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Daily_Techs/07-24-07tech5.gif
Commentary:We wrote yesterday that “a push through 1.2064 would satisfy minimum expectations so be wary of getting long on a break through that level.”After a spike to 1.2079 yesterday, the USDCHF appears headed for a test of 1.1960.A break of 1.1960 exposes 1.1877.
Strategy:Bearish now, against 1.2079, target TBD
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Daily_Techs/07-24-07tech6.gif
Commentary:There is no sign that the USDCAD has turned higher but 1.0400 has remained intact since 7/18 and the pair may be forming a base.A push above 1.0611 woud strongly indicate that a significant low is in place at 1.0400 as that would break the series of lower highs.
Strategy: Remain bullish, against 1.0400, target TBD
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Daily_Techs/07-24-07tech7.gif
Commentary:The AUDUSD has closed up 12 consecutive days (today would be the 13th), but the rally from .8707 is choppy (possible a diagonal), which warns that upside momentum is waning..8840 has been a measured objective and the high this morning is at .8862.Risk of a reversal is high.
Strategy: Flat
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/07/dailyfx_reports/Daily_Techs/07-24-07tech8.gif
Commentary: We wrote yesterday that “the 161.8% extension of .7237-.7637/.7452 is at .8099 and is also potential resistance.Althought Kiwi has extended, the form remains the same and we are looking for a 4th wave (within the 5 wave rally from .7237) to eventually unfold before a 5th wave makes a new high.The structure remains bullish.”This morning’s high at .8107 is just above the mentioned .8099.Still, the form still suggests that any decline will be corrective and that Kiwi is headed higher..8247, the 161.8% of .7714-.7940/.7882 is a new target.The structure is bullish above .7940.
Strategy:Flat
*JTREND is a proprietary calculation that uses recent highs, lows and closes to determine the trend.JTRENDLT is the longer term trend and uses the last 4 weeks of price data.JTRENDST is the shorter term trend and uses the last 5 days of price data.An example is below.Blue bars denote bullish trend and red bars denote bearish trend.The chart below is the EURUSD weekly chart.
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