EURUSD – We are still focused on channel resistance that dates to the May 2006 high.The rally stalled at this level last week and the spinning top candle on Wednesday also warns of at least a correction.The monthly chart (using USD/DEM prices before 1999) shows a potential triple top with the July 1995 (1.3822) and December 2004 (1.3670) highs.Daily RSI remains divergent with recent peaks and has declined from above 70.The technical evidence for a reversal is stronger when one considers the complete one sided sentiment (speculative positioning is at a new record for euro longs for the third week in a row now).
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USDJPY – The USDJPY broke out from the 118.22-119.03 consolidation in what could be the C wave of an A-B-C triangle.Remaining below 119.84 warrants a bearish bias for expectations of the reversal from the triangle breakout.The short term triple top at 119.74 also gives scope to more bearish potential.119.84 is risk with former resistance at 119.03 serving as potential support.A potential head and shoulders reversal is visible on the daily.
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GBPUSD – Cable has held at channel support so far, bouncing off of the 1.9900 figure this morning.Channel support along with the 3 wave decline from the top to 1.9864 keeps us looking higher but 1.9864 must hold for the bullish structure to remain intact.A break at 1.9864 exposes former resistance (now potential support) at 1.9822.
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USDCHF – The USDCHF has put in a short term triple bottom near 1.2000 and rallied through trendline resistance to test the 1.2100 figure this morning.The longer term wave structure is bullish as the decline from 1.2571 is a double zigzag (inverse of the EURUSD rally).A longer term inverse head and shoulders pattern (May 2006, December 2006, April 2007) is also visible.
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USDCAD – There is little change regarding the USDCAD.There is little doubt that the decline from 1.1825 is a 3rd wave.Therefore, any rally should be treated like a correction as a 5th wave decline will eventually take the USDCAD to lower levels.Initial resistance is the 4/24 high at 1.1246.With RSI putting in a momentum extreme on 4/25 at 19.91 (daily), downside potential looks limited as the next few weeks may be dominated by sideways/corrective trading in order to correct the oversold condition (daily).The next support level is the 9/28/2006 low at 1.1086.
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AUDUSD – The AUDUSD has bounced from the 20 day SMA but it remains our contention that the AUDUSD is reversing from a significant top.Weekly RSI is divergent and above 70 for the first time since November 2004.The rally from .7678 is an extended 5th wave, which are often fully retraced.
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NZDUSD – The break below the 2 month trendline and the bearish MACD crossover (daily) along with RSI declining from above 70 suggest that we look lower.Kiwi has also held below channel resistance.The evidence warrants a bearish stance against the 4/18 high at .7491.Former resistance at .7313 is now potential support.
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EURUSD – The reversal that we have been looking for may be underway (see http://www.dailyfx.com/story/charting_center/weekly_chart_analysis/Wave_Counts__Divergent_Oscillators__Pivot_1177085359949.html for more).Last week’s candle was a shooting star and daily RSI has rolled over from above 70.The EURUSD has come into initial support at 1.3560.Additional bearish potential increases with 5 waves down and so far there are only 3 waves down from 1.3637.If the larger trend has reversed, then we should see some consolidation/bounce in a 4th wave before a new low under 1.3549.1.3586 is key resistance.
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USDJPY – The USDJPY price action is bullish above 118.22.The 5 wave rally from 117.60 to 118.98 indicates that the larger trend is up and is most likely the first wave in a new 5 wave rally.The sharp correction to 118.22 is wave 2, and a rally above 118.98 would confirm that wave 3 up is underway.Measured objectives for wave 3 are at 119.60 and 120.45 (100% and 161.8% extensions of 117.60-118.98 / 118.22).Again, 118.22 needs to hold as support in order for the most bullish count to remain at the forefront.
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GBPUSD – The doji made on 4/18 along with divergent RSI on the daily gives scope to a reversal.Still, the decline from the top is corrective, which leaves GBPUSD open to another high.Coming under 1.9972 indicates that a deeper correction is taking place.A measured objective for would be at 1.9921/24, which is the confluence of the 38.2% of 1.9589-2.0131 / 100% of 2.0131-1.9984 / 2.0068.
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USDCHF – We mentioned Friday that “yesterday’s hammer at critical support keeps focus on the bullish reversal scenario.In fact, there are 5 small waves up from yesterday’s low at 1.2000 (an important psychological figure).Support resides at 1.2037.The longer term turn wave structure supports a reversal (higher) as well.A rally above 1.2281 would give credence to this view and suggest that an important low is in place.”The next short term resistance level is 1.2150 and 1.2056 should be support.
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USDCAD – The USDCAD may be forming a base from which to work higher.There is little doubt that the decline from 1.1825 is a 3rd wave.Therefore, any rally should be treated like a correction as a 5th wave decline will eventually take the USDCAD to lower levels.Initial resistance is the 4/19 high at 1.1309.The next support level is the 10/30/2006 low at 1.1176.
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AUDUSD – Recent commentary stated that “daily oscillators (CCI and RSI) are overbought and divergent with recent highs.Also, the break that occurred at .8000 was from a triangle and triangle breakouts are terminal (meaning that they are eventually retraced).The daily chart below shows the triangle (a-b-c-d-e) and the 5 wave rally that has ensued and RSI.With daily oscillator action, an extreme risk reversal rate (1 month 25 delta options) and the Aussie at former longer term resistance, we are looking for a reversal.”A 5 wave decline from .8390 sets the stage for more downside action and we are bearish against the high (.8390) on a break of trendline support near .8310.
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NZDUSD – Trendline support for Kiwi is not until about .7380 but the very short term wave count is bearish as there are 5 waves down from .7482 to .7428.This correction should be followed by another leg down with potential support at the mentioned trendline.We’ll watch the form of the decline in order to determine the proper course of action.
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EURUSD – There is no change in the call for a longer term top due to the 7 wave rally (which is a double zigzag….two zigzags connected with an X wave – labeled W-X-Y) from 1.1638, extreme sentiment readings, and overbought RSI on the daily.Still, a break of 1.3666 would expose 1.3799, which is where wave W (1.1638-1.2979) would equal wave Y (beginning at 1.2458).The rally from 1.3524 is choppy and may be an ending diagonal.If an ending diagonal is in the works, then 1.3637 could be exceeded once more in a 5th wave.Coming under 1.3560 signals a reversal.
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USDJPY – We remain bearish due to price crossing below the 20 day SMA, the resisting line from the 2/12 and 2/22 highs, the 61.8% of 122.17-115.14 at 119.48, the appearance of a head and shoulders reversal pattern, and most importantly, the longer term wave structure.The longer term wave structure strongly suggests that wave C (or 3) from a bearish sequence that began at 122.17 is underway and will eventually come under 115.14.However, yesterday’s hammer off of the 200 day SMA warns of a try on the 61.8% fibo of 119.84-117.60 at 118.98.Coming under 118.23 is the first sign of a turn lower.
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GBPUSD – The doji made on 4/18 along with overbought and divergent RSI on the daily gives scope to a reversal.Still, the decline from the top is corrective, which leaves GBPUSD open to another high.Coming under 1.9984 indicates that a deeper correction is taking place.A measured objective for would be at 1.9921/24, which is the confluence of the 38.2% of 1.9589-2.0131 / 100% of 2.0131-1.9984 / 2.0068.See yesterday’s report for bullish measured objectives.
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USDCHF – Yesterday’s hammer at critical support keeps focus on the bullish reversal scenario.In fact, there are 5 small waves up from yesterday’s low at 1.2000 (an important psychological figure).Support resides at 1.2037.The longer term turn wave structure supports a reversal (higher) as well.A rally above 1.2281 would give credence to this view and suggest that an important low is in place.
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USDCAD – The USDCAD decline is overextended and the nature of the decline from 1.1394 suggests that a bottom is close at hand.The decline from 1.1394 is a 5th wave and takes the form of an ending diagonal (overlapping waves).This latest spike lower is likely the thrust that is so common with these patterns.A return to the 1.1394 level in a correction is likely before another leg lower eventually challenges 1.0927.
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AUDUSD – Recent commentary stated that “daily oscillators (CCI and RSI) are overbought and divergent with recent highs.Also, the break that occurred at .8000 was from a triangle and triangle breakouts are terminal (meaning that they are eventually retraced).The daily chart below shows the triangle (a-b-c-d-e) and the 5 wave rally that has ensued and RSI.With daily oscillator action, an extreme risk reversal rate (1 month 25 delta options) and the Aussie at former longer term resistance, we are looking for a reversal.”A 5 wave decline from .8390 sets the stage for more downside action and we are bearish against the high (.8390) on a break of trendline support near .8280.
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NZDUSD – We showed the 5 wave decline from .7491 yesterday to suggest that another leg lower would occur.That leg lower took Kiwi to .7362 last night but this results in just a 3 wave decline from the high (.7491).This leaves the door open to another high, therefore we urge caution with regards to getting bearish before a break of the trendline (shown below).
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EURUSD – The EURUSD continues to rally, hitting 1.3615 this morning.The next level of chart resistance is the 2004 high at 1.3666.There is no change in the call for a longer term top due to the 7 wave rally (which is a double zigzag….two zigzags connected with an X wave – labeled W-X-Y) from 1.1638.Still, a break of 1.3666 would expose 1.3799, which is where wave W (1.1638-1.2979) would equal wave Y (beginning at 1.2458).The chart today shows the potential resisting line drawn off of the May 2006 and December 2006 highs.Daily RSI is overbought and divergent with the May and December peaks.The EURUSD could very well chop higher but evidence strongly suggests that the next move of consequence is down.Coming under 1.3524 bolsters the turn scenario.
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USDJPY – We remain bearish due to CCI crossing below 100 on the daily, the resisting line from the 2/12 and 2/22 highs, the 61.8% of 122.17-115.14 at 119.48, the appearance of a head and shoulders reversal pattern, and most importantly, the longer term wave structure.The longer term wave structure strongly suggests that wave C (or 3) from a bearish sequence that began at 122.17 is underway and will eventually come under 115.14.The short term bearish case is strong below 118.73 as a 3rd wave may be underway.Near term bearish targets are the 100% extension of 119.84-118.08 / 118.73 at 116.97 and the 161.8% extension at 115.88.Price has also come under the 200 day SMA.The alternate count has 5 waves already down from 119.84 with strong resistance at 118.73.
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GBPUSD – Cable traded to a 26 year high today after briefly trading above 2.0100.5 waves from 1.9589 may be complete, thus we are looking for a pullback (at least) with support residing in the previous congestion area of 1.9880/1.9938.A break below 1.9938 indicates additional bearish potential.A very short term trendline has been breached, which has bearish implications.While there are not 5 waves down yet from the top, remaining below 2.0093 warrants a cautious bearish bias for a possible 3rd wave lower.
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USDCHF – A rally above 1.2281 would inspire confidence in the longer term wave count that calls for a turn to much higher levels.This longer term turn scenario remains valid as long as 1.1877 holds.The USDCHF is coming into support from monthly S1, which is at 1.2002.Near term, there are 5 waves down from 1.2187, with resistance near the previous 4th wave at 1.2070.Until there are 5 waves up, well remain neutral.
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USDCAD – The USDCAD decline is overextended and the nature of the decline from 1.1394 suggests that a bottom is close at hand.The decline from 1.1394 is a 5th wave and takes the form of an ending diagonal (overlapping waves).This latest spike lower is likely the thrust that is so common with these patterns.A return to the 1.1394 level in a correction is likely before another leg lower eventually challenges 1.0927.
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AUDUSD – Recent commentary states that “daily oscillators (CCI and RSI) are overbought and divergent with recent highs.Also, the break that occurred at .8000 was from a triangle and triangle breakouts are terminal (meaning that they are eventually retraced).The daily chart below shows the triangle (a-b-c-d-e) and the 5 wave rally that has ensued and RSI.With daily oscillator action, an extreme risk reversal rate (1 month 25 delta options) and the Aussie at former longer term resistance, we are looking for a reversal.”A 5 wave decline from .8390 sets the stage for more downside action and we are bearish against the high (.8390) on a break of trendline support near .8280.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/04/dailyfx_reports/techs/04-19-07tech7.gif
NZDUSD – We showed the 5 wave decline from .7491 yesterday to suggest that another leg lower would occur.That leg lower took Kiwi to .7362 last night but this results in just a 3 wave decline from the high (.7491).This leaves the door open to another high, therefore we urge caution with regards to getting bearish before a break of the trendline (shown below).
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/04/dailyfx_reports/techs/04-19-07tech8.gif
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EURUSD – The EURUSD continues to rally, hitting 1.3615 this morning.The next level of chart resistance is the 2004 high at 1.3666.There is no change in the call for a longer term top due to the 7 wave rally (which is a double zigzag….two zigzags connected with an X wave – labeled W-X-Y) from 1.1638.Still, a break of 1.3666 would expose 1.3799, which is where wave W (1.1638-1.2979) would equal wave Y (beginning at 1.2458).Near term, a pullback to prior 4th wave support at 1.3524 looks likely.There is no sign that a top is yet in place but we will closely monitor the situation as this is a critical juncture.
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USDJPY – We mentioned yesterday that “on the daily, CCI is crossing below 100, which often signals a reversal.”A head and shoulders top is also evident on the daily.Coming under 118.20 strengthens the bearish case as it would end the series of higher lows since 115.14.Resistance should be strong at intraday resistance of 118.89.
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GBPUSD – Cable traded to a 26 year high today after briefly trading above 2.0100.5 waves from 1.9589 may be complete, thus we are looking for a pullback with support residing in the previous congestion area of 1.9880/1.9938.Only a break below 1.9822 indicates additional bearish potential and suggests that a major top may be in place.
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USDCHF – A 5 wave decline from 1.2187 suggests that at least a correction of strength back to the previous 4th wave near 1.2100 is due.A rally above 1.2281 would inspire confidence in the longer term wave count that calls for a turn to much higher levels.This longer term turn scenario remains valid as long as 1.1877 holds.240 minute RSI is bullish as the indicator is rising from oversold.
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USDCAD – The USDCAD decline has likely put in a short term low at 1.1276. The 161.8% extension of 1.1879-1.1568 / 1.1826 at 1.1315 projects a low near this area and 240 minute RSI is increasing from oversold and divergent readings.This consolidation (in wave 4) will likely be a flat or a triangle (as opposed to a sharper correction) because the 2nd wave correction was sharp.1.1394 is initial resistance.
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AUDUSD – The AUDUSD reversed course yesterday in front of .8400.Daily oscillators (CCI and RSI) are overbought and divergent with recent highs.Also, the break that occurred at .8000 was from a triangle and triangle breakouts are terminal (meaning that they are eventually retraced).The daily chart below shows the triangle (a-b-c-d-e) and the 5 wave rally that has ensued and RSI.With daily oscillator action, an extreme risk reversal rate (1 month 25 delta options) and the Aussie at former longer term resistance, we are looking for a reversal.Coming under .8303 signals that we are on the right track.
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NZDUSD – Kiwi reversed in front of .7500 last night.A Fibonacci turn date was Friday – but the longer term nature of the analysis allows for a deviation of 4 days.Daily RSI is overbought and divergent as well.Coming under .7374 would be the first sign that a top is in place.The decline from .7491 does look impulsive with small degree 4th and 5th waves to follow.5 waves lower indicates that the larger trend is down.For this reason, we have shown the 15 minute chart today.
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EURUSD – The EURUSD has taken out resistance from the March 2005 high as well as the 1.3500 figure.The next level of chart resistance is the 2004 high at 1.3666.There is no change in the call for a longer term top due to the 7 wave rally (which is a double zigzag….two zigzags connected with an X wave – labeled W-X-Y) from 1.1638.A break of 1.3666 would expose 1.3799, which is where wave W (1.1638-1.2979) would equal wave Y (beginning at 1.2458).Near term, the pair has run into resistance from a 2 month upward sloping channel line.Some consolidation in a 4th wave is expected support at 1.3486.The near term bull case is strong above 1.3453.Coming under 1.3453 is the first sign that a more significant top is in place.
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USDJPY – The USDJPY reversed from resistance off of a trendline drawn off of the 2/12 and 2/23 highs.A break above this line (yesterday’s high at 119.84) exposes the 78.6% of 122.17-115.14 at 120.67.There are conflicting signals.Price above 118.20 keeps intact the series of higher lows from the March low at 115.14.On the daily, CCI is crossing below 100, which often signals a reversal.
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GBPUSD – Cable traded to a 15 year high today.5 waves from 1.9589 are close to complete (see chart below) and a larger degree 5 wave structure may be nearing an end from 1.9182.Both monthly and weekly R2 levels are 2.0070 and both the 240 minute and daily charts show overbought oscillators that are divergent with highs.Cable may very well work higher and may be tracing out a 3rd wave with a measured objective at 2.0229 but the risk of a reversal is high and rising with each tick higher.
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USDCHF – The break below short term trendline support warrants a short term bearish bias as long as price remains below 1.2187.However, the longer term turn wave structure supports a reversal (higher) as long as 1.2027 remains solid.A rally above 1.2281 would give credence to this view and suggest that an important low is in place at 1.2027.
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USDCAD – The USDCAD continues to break down following the break of parallel channel support.The next potential support level is the 11/28/06 low of 1.1286.Daily RSI has reached oversold territory for the first time since April of 2006, so a bounce towards near term resistance at 1.1411 may be in order.The bearish case is strong below 1.1487.
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AUDUSD – The AUDUSD continues to remain bid close to the 1990 high of .8351.Daily oscillators (CCI and RSI) are overbought and divergent with recent highs.Also, the break that occurred at .8000 was from a triangle and triangle breakouts are terminal (meaning that they are eventually retraced).The daily chart below shows the triangle (a-b-c-d-e) and the 5 wave rally that has ensued and RSI.With daily oscillator action, an extreme risk reversal rate (1 month 25 delta options) and the Aussie at former longer term resistance, we are looking for a reversal.Coming under .8232 signals that we are on the right track.Yesterday’s shooting star candle does have bearish reversal implications.
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NZDUSD – Kiwi looks poised to challenge the 2005 high at .7469.A Fibonacci turn date was Friday – but the longer term nature of the analysis allows for a deviation of 4 days.Daily RSI is overbought and divergent as well.Coming under .7374 would be the first sign that a top is in place.
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EURUSD – The EURUSD has taken out resistance from the March 2005 high as well as the 1.3500 figure.The next level of chart resistance is the 2004 high at 1.3666.There is no change in the call for a longer term top due to the 7 wave rally (which is a double zigzag….two zigzags connected with an X wave – labeled W-X-Y) from 1.1638.A break of 1.3666 would expose 1.3799, which is where wave W (1.1638-1.2979) would equal wave Y (beginning at 1.2458).Near term, the pair has run into resistance from a 2 month upward sloping channel line.Some consolidation in a 4th wave is expected support at 1.3486.The near term bull case is strong above 1.3453.Coming under 1.3453 is the first sign that a more significant top is in place.
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USDJPY – The USDJPY reversed midday Friday and trades at a month and half high after taking out resistance from the previous week at 119.50.A daily close above potential trendline resistance drawn off of the 2/12 and 2/22 highs would increase confidence in a near term bullish outlook.A break above 120.00 exposes the 78.6% of 122.17-115.14 at 120.67.Today’s low at 118.96 is support.
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GBPUSD – Cable has traded to a new high for 2007 this morning and focus remains on the psychological 2.0000 figure.Given the presence of 2.0000 along with the possibility that 5 waves are complete from 1.9589, the risk of a reversal is high.Some consolidation/pullback is expected as oscillators are overbought on both daily and intraday charts.1.9781 is initial support.Coming under short term trendline support, just above 1.9700, indicates additional bearish potential.
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USDCHF – The break below short term trendline support warrants a short term bearish bias as long as price remains below 1.2187.However, the longer term turn wave structure supports a reversal (higher) as long as 1.2027 remains solid.A rally above 1.2281 would give credence to this view and suggest that an important low is in place at 1.2027.
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USDCAD – The USDCAD continues to break down following the break of parallel channel support.The next potential support level is the 11/28/06 low of 1.1286.Daily RSI has reached oversold territory for the first time since April of 2006, so a bounce towards near term resistance at 1.1411 may be in order.The bearish case is strong below 1.1487.
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AUDUSD – The AUDUSD continues to rally and briefly traded above the 1990 high of .8351 today.Daily oscillators (CCI and RSI) are overbought and divergent with recent highs.Also, the break that occurred at .8000 was from a triangle and triangle breakouts are terminal (meaning that they are eventually retraced).The daily chart below shows the triangle (a-b-c-d-e) and the 5 wave rally that has ensued and RSI.With daily oscillator action, an extreme risk reversal rate (1 month 25 delta options) and the Aussie at former longer term resistance, we are looking for a reversal.Coming under .8232 signals that we are on the right track.
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NZDUSD – Kiwi briefly traded above .7400 today, just 50 pips from the March 2005 high at .7463.A Fibonacci turn date was Friday – but the longer term nature of the analysis allows for a deviation of 4 days.Daily RSI is overbought and divergent as well.Coming under .7313 would be the first sign that a top is in place.
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EURUSD – The EURUSD has taken out resistance from the March 2005 high as well as the 1.3500 figure.The next level of chart resistance is the 2004 high at 1.3666.There is no change in the call for a top due to the 7 wave rally (which is a double zigzag….two zigzags connected with an X wave – labeled W-X-Y) from 1.1638.A break of 1.3666 would expose 1.3799, which is where wave W (1.1638-1.2979) would equal wave Y (beginning at 1.2458).Near term, the pair has run into resistance from a 2 month upward sloping channel line and RSI is overbought on every time frame from daily on down to 5 minutes.It looks like some consolidation / correction in a 4th wave will unfold above 1.3453 before a 5th wave rally.
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USDJPY – We mentioned yesterday that “the near term bullish structure is strong as long as the 4/10 low at 118.74 remains intact.Coming under this level indicates stronger bearish potential.In fact, the entire rally from 115.14 could be the end of a big A-B-C correction.If this is the case, then the USDJPY will start to decline from close to current price.”The pair did roll over and is currently testing the 20 day SMA at 118.28.A close below bolsters the bearish outlook and potential for a C wave decline to eventually come under 115.14.The pattern developing is taking the form of a head and shoulders top.
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GBPUSD – Cable has rallied through the 4/3 high at 1.9822 and focus is now on the 2007 high at 1.9914 (1/23 high) and then psychological 2.0000 figure.The break of 1.9822 suggests that Cable is in a 3rd wave that will break above 1.9914.The structure is bullish as long as price remains above 1.9722 but support should be strong at 1.9815.
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USDCHF – Having broken short term trendline support, the USDCHF appears to be in a 3rd wave lower.A measured objective for the end of this 3rd wave is the 161.8% extension of 1.2281-1.2142 / 1.2243 at 1.2018.Potential support there is reinforced by the 3/16 low at 1.2027.Remaining below 1.2142 keeps the bearish structure intact and focus on 1.2018/27.
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USDCAD – The USDCAD continues to break down following the break of parallel channel support.The next potential support level is the 11/28/06 low of 1.1286.Daily RSI has reached oversold territory for the first time since April of 2006, so a bounce towards near term resistance at 1.1411 may be in order.The bearish case is strong below 1.1487.
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AUDUSD – The AUDUSD continues to rally and is close to the 1990 high of .8351.Daily oscillators (CCI and RSI) are overbought and divergent with recent highs.Also, the break that occurred at .8000 was from a triangle and triangle breakouts are terminal (meaning that they are eventually retraced).The daily chart below shows the triangle (a-b-c-d-e) and the 5 wave rally that has ensued and RSI.With daily oscillator action, an extreme risk reversal rate (1 month 25 delta options) and the Aussie probing 1990 highs, we are looking for a reversal.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/04/dailyfx_reports/techs/04-13-07tech7.gif
NZDUSD – The decline from the March 2005 high to the June 2006 low lasted 68 weeks.The rally from the June 2006 low has lasted 41 weeks (41st week ended on April 6th).The long term rally and decline is in Fibonacci proportion this week.Since this is the 42nd week (68/42 = 1.618), the odds of the NZDUSD putting in a significant top this week are high.Near term, it looks like the NZDUSD is tracing out an ending diagonal in a 5th wave from .7082 – these patterns lead to violent reversals.A decline below the former resisting line of the diagonal triangle is at 73.10 and a decline below there would bolster a reversal case but the decline will have to show impulsive characteristics as well.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/04/dailyfx_reports/techs/04-13-07tech8.gif
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EURUSD – The short term bullish structure remains intact as long as price remains above yesterday’s low at 1.3406.Confidence that a top is in place would come on a decline below the short term trendline drawn off of the 3/26, 3/30, and 4/9 lows.That line is at about 1.3365 In fact, the rally from the 1.3254 has taken the form of an ending diagonal triangle (wedge).These patterns often mark the end of a larger move (from 1.2865 in this instance).The pattern often ends in a ‘throw over’ where the pair thrusts higher through the resisting line of the ending diagonal before reversing.Focus is on 1.3483 as long as 1.3406 remains intact.
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USDJPY – The clear 5 wave rally from 116.37 sets the stage for more gains but the confluence of the 61.8% of 122.17-115.14 / monthly R1 at 119.48 may be difficult for bulls to overcome as the pair stalled there yesterday.If this level is cleared, then the bullish bias is that much stronger.The near term bullish structure is strong as long as the 4/10 low at 118.74 remains intact.Coming under this level indicates stronger bearish potential.In fact, the entire rally from 115.14 could be the end of a big A-B-C correction.If this is the case, then the USDJPY will start to decline from close to current price.
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GBPUSD – The 5 wave advance from 1.9589 appears complete with the 1.9800 figure proving formidable as resistance.A period of consolidation / softness is expected before another impulsive rally unfolds.1.9703 should be solid support.However, the triple top and shooting star on the weekly chart urges caution and suggests that a major top is forming.Coming under 1.9589 negates the near term bullish outlook (under 1.9671 would be the first indication that this rally will be fully retraced) and brings the ‘top forming’ scenario back to the forefront.
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USDCHF – As long as price remains above the short term support line and the 4/5 low at 1.2122, scope remains for a break above 1.2281 in a 3rd wave rally.However, last night’s reversal prior to 1.2250 is disconcerting to bulls.A decline below 1.2122 negates the bullish implications from the 1.2122-1.2281 5 wave rally.Additionally, daily CCI has declined below 100, which is often the sign of a reversal.The monthly pivot zone is 1.2165/91.A daily close either side of this zone sets the directional bias.
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USDCAD – The USDCAD continues to break down following the break of parallel channel support.The next potential support level is the 11/28/06 low of 1.1286.Daily RSI has reached oversold territory for the first time since April of 2006, so a bounce towards near term resistance at 1.1411 may be in order.The bearish case is strong below 1.1487.
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AUDUSD – The AUDUSD has consolidated in what is either a distribution top or simply a brief pause in the uptrend.Daily oscillators (CCI and RSI) are overbought and divergent with recent highs.Also, the break that occurred at .8000 was from a triangle and triangle breakouts are terminal (meaning that they are eventually retraced).The daily chart below shows the triangle (a-b-c-d-e) and the 5 wave rally that has ensued and RSI.The Aussie has stalled at the monthly R1 (.8249) point and the next level of resistance is the 1990 high at .8351.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/04/dailyfx_reports/techs/04-12-07tech7.gif
NZDUSD – The decline from the March 2005 high to the June 2006 low lasted 68 weeks.The rally from the June 2006 low has lasted 41 weeks (41st week ended on April 6th).The long term rally and decline is in Fibonacci proportion this week.Since this is the 42nd week (68/42 = 1.618), the odds of the NZDUSD putting in a significant top this week are high.Monthly R1 is a possible reversal point at .7327.Near term, it looks like the NZDUSD is tracing out an ending diagonal in a 5th wave from .7082 – these patterns lead to violent reversals.However, the decline from .7313 is corrective so far and does not instill much confidence in a reversal scenario.A decline below the support line from the ending diagonal, near .7220, is required before we can suggest that a top is in place.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/04/dailyfx_reports/techs/04-12-07tech8.gif
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EURUSD – The EURUSD is playing out as expected.“We are looking for a significant top due to the 7 wave rally from the November 2005 low at 1.1640.7 waves is really just two 3 wave structures linked together by an X wave.This is known as a double zigzag and is a countertrend movement.”However, a 5 wave decline from 1.3439-1.3338 followed by a 5 wave advance from 1.3338-1.3453 clouds the near term picture.The overlapping structure from the 3/26 low at 1.3254 suggests that an ending diagonal is forming.If this is the case, then a turn lower is nearby.
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USDJPY – The clear 5 wave rally from 116.37 sets the stage for more gains but the confluence of the 61.8% of 122.17-115.14 / monthly R1 at 119.48 may be difficult for bulls to overcome.If this level is cleared, then the bullish bias is that much stronger.The risk reversal rate on 1 month options is increasing from its most depressed levels since March 2004.The USDJPY bottomed at 103.40 then after having fallen from 112.30. The ensuing rally saw 114.90 in a little less than 2 months time.
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GBPUSD – The 5 wave advance from 1.9589 appears complete with the 1.9800 figure proving formidable as resistance.A period of consolidation / softness is expected before another impulsive rally unfolds.1.9703 should be solid support.However, the triple top and shooting star on the weekly chart urges caution and suggests that a major top is forming.Coming under 1.9589 negates the near term bullish outlook (under 1.9671 would be the first indication that this rally will be fully retraced) and brings the ‘top forming’ scenario back to the forefront.
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USDCHF – From yesterday, “The clear ‘5 up’ extended to 1.2281 but the USDCHF has slipped to the 61.8% of 1.2122-1.2281 at 1.2183 – and lessened our confidence in the USDCHF bullish outlook.Still, a bullish outcome is possible as long as price remains above 1.2122.”The USDCHF has rallied and found support before 1.2122 yesterday, keeping the bullish structure intact.A rally above 1.2281 bolsters the outlook for higher prices.
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USDCAD – From yesterday – “There are 2 assumptions two scenarios that we are working with.There are 5 waves down from 1.1828 but that may be the end of a correction (an A-B-C from 1.1879) rather than the beginning of an impulsive move.The declines continue to exhibit impulsive characteristics, but a clear break of parallel channel support is required before we can get aggressive.”The USDCAD closed below the line yesterday and the trend is clearly lower.Former reaction lows at the 12/20/2006 low of 1.1430 and the 11/28/2006 low of 1.1286 are potential support.Be wary of getting too bearish here though as the decline from 1.1635 may be an ending diagonal that will be fully retraced before the next leg down.
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AUDUSD – The AUDUSD continues to rally impulsively but we maintain that the rally is in its latter stages.Daily oscillators (CCI and RSI) are overbought and divergent with recent highs.Also, the break that occurred at .8000 was from a triangle and triangle breakouts are terminal (meaning that they are eventually retraced).The daily chart below shows the triangle (a-b-c-d-e) and the 5 wave rally that has ensued and RSI.The rally has extended to monthly R1 today, .8279, which is a potential reversal point.The next level is not until R2 at .8410.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/04/dailyfx_reports/techs/04-11-07tech7.gif
NZDUSD – The decline from the March 2005 high to the June 2006 low lasted 68 weeks.The rally from the June 2006 low has lasted 41 weeks (41st week ended on April 6th).The long term rally and decline is in Fibonacci proportion this week.Since this is the 42nd week (68/42 = 1.618), the odds of the NZDUSD putting in a significant top this week are high.Monthly R1 is a possible reversal point at .7327.Near term, it looks like the NZDUSD is tracing out an ending diagonal in a 5th wave from .7082 – these patterns lead to violent reversals.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/04/dailyfx_reports/techs/04-11-07tech8.gif
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EURUSD – The EURUSD is playing out as expected.“We are looking for a significant top due to the 7 wave rally from the November 2005 low at 1.1640.7 waves is really just two 3 wave structures linked together by an X wave.This is known as a double zigzag and is a countertrend movement.”The terminal thrust from the triangle is complete and there are 5 waves down from 1.3439 to 1.3352.However, the rally that has ensued has carried within pips of 1.3439.For the bearish structure to remain intact, price must roll over before 1.3439.Coming under 1.3338 bolsters the outlook for lower prices.A break above 1.3439 encounters resistance at the March 2005 high of 1.3483 – this level is reinforced by monthly R1 at 1.3487
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USDJPY – The clear 5 wave rally from 116.37 sets the stage for more gains but the confluence of the 61.8% of 122.17-115.14 / monthly R1 at 119.48 may be difficult for bulls to overcome.If this level is cleared, then the bullish bias is that much stronger.The bit of weakness that we saw last night is either wave 2 or the first leg of wave 2 that will test down near 118.43.Either way, the bigger picture is bullish.The risk reversal rate on 1 month options is increasing from its most depressed levels since March 2004.The USDJPY bottomed at 103.40 then after having fallen from 112.30.The ensuing rally say 114.90 in a little less than 2 months time.
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GBPUSD – The correction that we were looking for to test 1.9545 appears to have ended at 1.9589 as the rally from there is in 5 waves and impulsive.The 4/4 high / 78.6% of 1.9822-1.9589 at 1.9772 may prove formidable as resistance and support should be strong at 1.9671 (former 4th wave) if higher prices lie ahead.However, the triple top and shooting star on the weekly chart urges caution and suggests that a major top is forming.Coming under 1.9589 negates the near term bullish outlook (under 1.9671 would be the first indication that this rally will be fully retraced) and brings the ‘top forming’ scenario back to the forefront.
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USDCHF – From yesterday, “The short term subdivisions have cleared up with the USDCHF tracing out a small 5 wave advance from 1.2122 to 1.2232.A small consolidation may have already occurred but a dip should be short lived with Fibonacci support beginning at the 38.2% of 1.2122-1.2232 at 1.2190 (the 61.8% is at 1.2164).”The clear ‘5 up’ extended to 1.2281 but the USDCHF has slipped to the 61.8%of 1.2122-1.2281 at 1.2183 – and lessened our confidence in the USDCHF bullish outlook.Still, a bullish outcome is possible as long as price remains above 1.2122.
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USDCAD – From yesterday – “There are 2 assumptions two scenarios that we are working with.There are 5 waves down from 1.1828 but that may be the end of a correction (an A-B-C from 1.1879) rather than the beginning of an impulsive move.The declines continue to exhibit impulsive characteristics, but a clear break of parallel channel support is required before we can get aggressive.”The USDCAD has broken through parallel channel support today (a daily close below would be even more convincing).Former reaction lows at the 12/20/2006 low of 1.1430 and the 11/28/2006 low of 1.1286 are potential support.Be wary of getting too bearish here though as the decline from 1.1635 may be an ending diagonal that will be fully retraced before the next leg down.
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AUDUSD –The AUDUSD continues to rally impulsively but we maintain that the rally is in its latter stages.Daily oscillators (CCI and RSI) are overbought and divergent with recent highs.Also, the break that occurred at .8000 was from a triangle and triangle breakouts are terminal (meaning that they are eventually retraced).The daily chart below shows the triangle (a-b-c-d-e) and the 5 wave rally that has ensued and RSI.The rally has extended to monthly R1 today, .8279, which is a potential reversal point.The next level is not until R2 at .8410.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/04/dailyfx_reports/techs/04-10-07tech7.gif
NZDUSD – The decline from the March 2005 high to the June 2006 low lasted 68 weeks.The rally from the June 2006 low has lasted 41 weeks (41st week ended on April 6th).The long term rally and decline is in Fibonacci proportion this week.Since this is the 42nd week (68/42 = 1.618), the odds of the NZDUSD putting in a significant top this week are high.Monthly R1 is a possible reversal point at .7327.Near term, it looks like the NZDUSD is tracing out an ending diagonal in a 5th wave from .7082 – these patterns lead to violent reversals.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/04/dailyfx_reports/techs/04-10-07tech8.gif
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EURUSD – The EURUSD is playing out as expected.“We are looking for a significant top due to the 7 wave rally from the November 2005 low at 1.1640.7 waves is really just two 3 wave structures linked together by an X wave.This is known as a double zigzag and is a countertrend movement.”The terminal thrust from the triangle is complete and there are 5 waves down from 1.3439 to 1.3352.The bounce that has followed should give way to another impulsive decline towards the 3/26 low at 1.3254.The 61.8% of 1.3439-1.3352 at 1.3406 is resistance.Daily CCI is divergent with the recent high and has declined below 100.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/04/dailyfx_reports/techs/04-09-07techs2.gif
USDJPY – The USDJPY has continued to rally as expected but with 5 waves up from 116.37 and the specter of the 61.8% of 122.17-115.14 at 119.48 looming, the possibility of a period of softness / consolidation should be considered.240 minute RSI has crossed above and below 70 as well.The 5 waves up could be the C wave and end of a correction or the beginning of a new uptrend.A break below 118.43 favors the former scenario.
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GBPUSD – We are still looking for a deeper decline to challenge at least the area of prior 4th wave support at 1.9545.The reason for our bearish view is the appearance of the completion of 5 waves up from 1.9182.The break below trendline support on Friday instills confidence in this view.1.9668 is very short term resistance.The weekly chart hints at a more significant reversal.Last week’s candle was a shooting star and a triple top is evident with the December 2006, January, and April highs.
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USDCHF – The short term subdivisions have cleared up with the USDCHF tracing out a small 5 wave advance from 1.2122 to 1.2232.A small consolidation may have already occurred but a dip should be short lived with Fibonacci support beginning at the 38.2% of 1.2122-1.2232 at 1.2190 (the 61.8% is at 1.2164).A rally through the 3/30 high of 1.2238 signals a bullish breakout and shifts focus to the 3/9 high at 1.2354.
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USDCAD – There are 2 assumptions two scenarios that we are working with.There are 5 waves down from 1.1828 but that may be the end of a correction (an A-B-C from 1.1879) rather than the beginning of an impulsive move.The declines continue to exhibit impulsive characteristics, but a clear break of parallel channel support is required before we can get aggressive.If the next larger move is down, then 1.1543 should act as solid resistance.
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AUDUSD –We still maintain that the AUDUSD is nearing the latter stages of a long term rally.With 5 waves up from .7678, we expect at least a correction back towards the previous 4th wave low at .8028.Both daily RSI and CCI have rolled over from overbought levels, signaling a reversal.With an impulsive decline from .8201 to .8150, we can get bearish against .8210.
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NZDUSD – The rally from the May 2004 bottom to the March 2005 high lasted 44 weeks.The decline from the March 2005 high to the June 2006 low lasted 68 weeks.The rally from the June 2006 low has lasted 41 weeks (41st week ended on April 6th).Kiwi may be exhibiting a longer term rhythm with the 40-odd week rallies but the long term rallies and declines are also in Fibonacci proportion regarding time as42/68 = .618.Short term, a head and shoulders reversal may be setting up as well.The neckline is just above the .7200 figure.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/04/dailyfx_reports/techs/04-09-07techs8.gif
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EURUSD – The EURUSD is playing out as expected.“We are looking for a significant top due to the 7 wave rally from the November 2005 low at 1.1640.7 waves is really just two 3 wave structures linked together by an X wave.This is known as a double zigzag and is a countertrend movement.In the short term, a triangle appears to be forming from the 1.3413 high, thus we are looking for a terminal thrust higher following completion of the triangle.”The terminal thrust higher that we were looking for is in progress.It appears that the EURUSD needs to register one more high (above 1.3439) in order to complete a 5th wave.Resistance on a break higher is at the March 2005 high of 1.3483.It is important to keep in mind that we are expecting a reversal following one more high as triangles lead to terminal thrusts.
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USDJPY – Nothing has changed regarding the USDJPY as the recent consolidation looks like a 4th wave correction.“The hourly chart suggests that 119.11 will be exceeded in order to complete the rally from 116.38.We are looking for a small degree 5th wave to challenge the 61.8% of 122.20-115.15 at 119.51.Regarding the bigger picture, we still think that the decline to 115.15 was the first leg of weakness in a larger bearish sequence.The corrective nature of the rally from 115.15 favors this view.As such, we are looking for a top and reversal close to 119.50.”Coming under 118.39 would indicate additional bearish potential.
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GBPUSD – We are still looking for a deeper decline to challenge at least the area of prior 4th wave support at 1.9545.The reason for our bearish view is the appearance of the completion of 5 waves up from 1.9182.However, the decline from the top (1.9822) is in 3 waves (which is corrective) and Cable has held trendline support.A break below the confluence of trendline support / 1.9668 is the trigger for a decline to 1.9545 (at least).The technical picture remains cautiously bullish above this 1.9668.CCI has rolled over from 100 – which supports a reversal.
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USDCHF – The longer term bullish bias is intact as long as price remains above 1.2030.The short term subdivisions are not clear but the bigger picture is bullish since the entire decline from 1.2575 can be classified as a double zigzag.The next short term hurdle for bulls is the 3/30 high at 1.2242.1.2076 should be strong support.Minor support is at yesterday’s low of 1.2175.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/04/dailyfx_reports/techs/04-06-07techs5.gif
USDCAD – There are 2 assumptions two scenarios that we are working with.There are 5 waves down from 1.1828 but that may be the end of a correction (an A-B-C from 1.1879) rather than the beginning of an impulsive move.The declines continue to exhibit impulsive characteristics, but a clear break of parallel channel support is required before we can get aggressive.If the next larger move is down, then 1.1640 should act as solid resistance.
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AUDUSD –We still maintain that the AUDUSD is nearing the latter stages of a long term rally.Daily RSI continues to hover near the 70 overbought line for the first time since November 2006.The rally from .7680 is in 5 waves which could be the end of the 5th wave in the 5 wave bullish sequence that began in April 2001 (see chart below).If this is the case, then we are near a major top and the next big move is towards .7000.Divergence with RSI at the recent high increases confidence in the call for a top..8030/40 is initial support.Weekly RSI has reached overbought for the first time since November 2004.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/04/dailyfx_reports/techs/04-06-07techs7.gif
NZDUSD – Kiwi is in the same position as the AUDUSD.The rally from .6720 is now in 5 waves and thus the form is complete so a top and reversal should soon follow.However, there is always the risk that the 5th wave extends.Still, daily oscillators are divergent with the recent high so we believe that the reversal scenario is a valid one.Daily CCI has crosses below 100.There is an interesting time relationship as well.The rally from the May 2004 bottom to the March 2005 high lasted 44 weeks.The decline from the March 2005 high to the June 2006 low lasted 68 weeks.The rally from the June 2006 low has lasted 41 weeks (so far).Kiwi may be exhibiting a longer term rhythm with the 40-odd week rallies but the long term rallies and declines are also in Fibonacci proportion regarding time as42/68 = .618.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/04/dailyfx_reports/techs/04-06-07techs8.gif
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EURUSD – With the EURUSD treading water – nothing has changed regarding our longer term outlook.“We are looking for a significant top due to the 7 wave rally from the November 2005 low at 1.1640.7 waves is really just two 3 wave structures linked together by an X wave.This is known as a double zigzag and is a countertrend movement.”In the short term, a triangle appears to be forming from the 1.3413 high, thus we are looking for a terminal thrust higher following completion of the triangle.Resistance on a break higher is at the March 2005 high of 1.3483.The triangle interpretation is play as long as 1.3254 holds as support.
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USDJPY – The USDJPY has had trouble with the 119.00 figure but wave structure on the hourly chart suggests that 119.11 will be exceeded in order to complete the rally from 116.38.We are looking for a small degree 5th wave to challenge the 61.8% of 122.20-115.15 at 119.51.Regarding the bigger picture, we still think that the decline to 115.15 was the first leg of weakness in a larger bearish sequence.The corrective nature of the rally from 115.15 favors this view.As such, we are looking for a top and reversal close to 119.50.
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GBPUSD – Our view on Cable is proving correct so far so there is no reason to change our outlook.“It is hard to say if this is the beginning of protracted weakness but a triple top is evident on the daily (December 2006, January and present highs).With a 5 wave advance from 1.9183, we are looking for at least a return to the previous 5th wave, near 1.9550.”Coming under 1.9663 would bolster the short term bearish case.1.9826 is critical resistance.Daily CCI has rolled over 100, which supports a more significant reversal.
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USDCHF – The USDCHF has crept higher and broken through trendline resistance.The short term subdivisions are not clear but the bigger picture is bullish since the entire decline from 1.2575 can be classified as a double zigzag.The next short term hurdle for bulls is the 3/30 high at 1.2242.1.2076 should be strong support.Minor support is at yesterday’s low of 1.2175.
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USDCAD – There are 2 assumptions two scenarios that we are working with.There are 5 waves down from 1.1828 but that may be the end of a correction (an A-B-C from 1.1879) rather than the beginning of an impulsive move.The way in which this rally attempt unfolds will give us a better idea of what to expect.1.1640 should be strong resistance.A break of 1.1499 and then 1.1457 would strongly suggest that the USDCAD was on its way to a new low below 1.0927.The break of trendline support also favors the bearish scenario.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/04/dailyfx_reports/techs/04-05-07techs6.gif
AUDUSD –We still maintain that the AUDUSD is nearing the latter stages of a long term rally.Daily RSI continues to hover near the 70 overbought line for the first time since November 2006.The rally from .7680 is in 5 waves which could be the end of the 5th wave in the 5 wave bullish sequence that began in April 2001 (see chart below).If this is the case, then we are near a major top and the next big move is towards .7000.Divergence with RSI at the recent high increases confidence in the call for a top..8030/40 is initial support.Weekly RSI has reached overbought for the first time since November 2004.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/04/dailyfx_reports/techs/04-05-07techs7.gif
NZDUSD – Kiwi is in the same position as the AUDUSD.The rally from .6720 is now in 5 waves and thus the form is complete so a top and reversal should soon follow.However, there is always the risk that the 5th wave extends.Still, daily oscillators are divergent with the recent high so we believe that the reversal scenario is a valid one.Daily CCI has crosses below 100.There is an interesting time relationship as well.The rally from the May 2004 bottom to the March 2005 high lasted 44 weeks.The decline from the March 2005 high to the June 2006 low lasted 68 weeks.The rally from the June 2006 low has lasted 41 weeks (so far).Kiwi may be exhibiting a longer term rhythm with the 40-odd week rallies but the long term rallies and declines are also in Fibonacci proportion regarding time as42/68 = .618.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/04/dailyfx_reports/techs/04-05-07techs8.gif
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EURUSD – The EURUSD continues to churn through the 1.3400-1.3250 range as the pair shows little directional bias. However, volatility on the 240 minute charts is beginning to compress. The pair has carved out a symmetrical triangle which tends to resolve in a breakout that often dictates direction for the near term . For now, the price action remains decidedly neutraland favors continued range trading.
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USDJPY – USDJPY has risen into the 50%-61.8% Fibonacci “box” from the 1/29-3/05/07 bear wave. If the price actions peters out at that level on the daily charts it would suggest a possible turn in the pair as it may once again targets the 3/05 low of 115.14 for a possible double bottom test.
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GBPUSD – The triple top that is forming in the GBPUSD that we referred to yesterday continues to play out. The formation is confirmed further by the divergence on the momentum oscillators such as MACD. Only a break and a close on a daily basis of the recent 1.9823 swing high would negate the current down trend scenario.
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USDCHF – The steady downtrend in USDCHF on the higher time frame seems to be butting heads with the correction the pair has lived out since 3/16. Aside from merely testing resistance from the channel top, nearby resistance at 1.2240 has proven itself with an intra-day triple top and a number of fibs that are subsequently pulled from various key waves. For the 240-minute time frame, the most pertinent wave is the bear run from the 1/31 high to the 3/16 low, whose 38.2% is playing the part of resistance.
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USDCAD – After working on two green bars, USDCAD has begun to pull back from yesterday’s highs. Should the high stay in place it would provide further confirmation to the short-term, downward slopping trendline that begins with the 3/26 high. While a pull back to the bigger trend channel bottom may be in the works, technicals still favor a bigger rebound than what has developed so far this week. With a big 38.2% fib of the 1.0930-1.1879, channel support and a bullish divergence on the MACD, the market will eye 1.15 closely.
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AUDUSD –Though AUDUSD may be nearing the end of a long-term uptrend, bulls are not ready to let give the pair up just yet. In the Asian and European sessions, price action put in the necessary components for a massive daily, reversal candle. This adds weight to support through demand, though the steep pitch of the past month’s rally can only last so long before AUDUSD goes into congestion to relieve some of the overbought sentiment in the market. Resistance is not far above spot at .8215, giving short-term bulls an objective.
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NZDUSD – Like AUDUSD, NZDUSD has reinstituted the long-term uptrend. However, also like its sister pair, NZDUSD has not yet surpassed last month’s highs. Spot will need to surpass the 4/2 intraday high to confirm an extension of the wave that began after the turn higher at .7080. To validate a pivotal turn on the higher time frame, a number of support levels will have to be sacrificed. First and foremost, the rising trendline from 3/18 needs to be breached before bears target .7165 and .7080 further down.
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Glossary of Terms
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EURUSD – The rally from 1.3256 to 1.3403 is overlapping and corrective in nature, which does not inspire much confidence in the bullish case.Coming under trendline support, near 1.3350, would be the first indication that the pair has turned lower from a significant top.We are looking for a significant top due to the 7 wave rally from the November 2005 low at 1.1640.7 waves is really just two 3 wave structures linked together by an X wave.This is known as a double zigzag and is a countertrend movement.If 1.3413 is broken, then the bearish outlook is suspendedand focus would shift to the 3/11/2005 high at 1.3483.
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USDJPY – After turning down from triangle resistance last week, the USDJPY has blasted through 118.51 and invalidated the triangle.Focus is now on a continuation of strength towards the 61.8% of 122.20-115.15 at 119.51.There is also potential resistance from the 2/16 reaction low at 118.99.Former resistance at 118.00 is now support.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/04/dailyfx_reports/techs/04-03-07techs3.gif
GBPUSD – We wrote last week that “we are looking higher in order for a 5th wave to complete a 5 wave bullish sequence that began at 1.9243.Wave 1 would equal wave 5 at 1.9798.”Cable rallied to 1.9826 today before turning lower.It is hard to say if this is the beginning of protracted weakness but a triple top is evident on the daily (December 2006, January and present highs).With a 5 wave advance from 1.9183, we are looking for at least a return to the previous 5th wave, near 1.9550.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/04/dailyfx_reports/techs/04-03-07techs4.gif
USDCHF – The USDCHF continues to mark time between primarily 1.2100 and 1.2200.The short term subdivisions are not clear but the chart we showed a few days ago that depicts the entire decline from 1.2575 as a double zigzag correction remains valid. A break above potential trendline resistance drawn off of the 2/12 and 3/12 highs would increase confidence in the upside.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/04/dailyfx_reports/techs/04-03-07techs5.gif
USDCAD – The USDCAD appears to be working higher now from channel support (and the 1.1500 figure).There are 5 waves down from 1.1828 but that may be the end of a correction (an A-B-C from 1.1879) rather than the beginning of an impulsive move.The way in which this rally attempt unfolds will give us a better idea of what to expect.Given the 5 wave decline from 1.1828, a return to 1.1640 seems likely.
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AUDUSD –We still maintain that the AUDUSD is nearing the latter stages of a long term rally.Daily RSI has crossed above and then below 70 (overbought) for the first time since November 2006.The rally from .7680 is in 5 waves and could be the end of the 5th wave in the 5 wave bullish sequence that began in April 2001 (see chart below).If this is the case, then we are near a major top and the next big move is towards .7000.There is no evidence yet that a top is in place – we’ll require a 5 wave decline (even at the smallest degree) in order to claim that a top is in place.However, the likelihood that we are very close to a top is high as there are now 5 waves higher from .7680.The next resistance would be the December 1996 high at .8215..8030/40 is initial support.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/04/dailyfx_reports/techs/04-03-07techs7.gif
NZDUSD – Kiwi is in the same position as the AUDUSD.The rally from .6720 is now in 5 waves and thus the form is complete so a top and reversal should soon follow.However, there is always the risk that the 5th wave extends.Still, daily oscillators are divergent with the recent high so we believe that the reversal scenario is a valid one..7081 is initial support.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/04/dailyfx_reports/techs/04-03-07techs8.gif
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EURUSD – Near term, the subdivisions impart a bullish tone.The decline from 1.3413 to 1.3256 is in 3 waves and thus corrective.We proposed yesterday that the rally from 1.3256 to 1.3377 is either wave i or b.With the rally from 1.3253 taking on impulsive characteristics, we are expecting a break above 1.3377 and ultimately 1.3413 with the decline from 1.3377 nearing an end.1.3483, the 3/11/2005 high, is potential resistance on a break above 1.3413.1.3253 is critical support.We are looking for a turn lower long term and coming under 1.3253 may mark that turn.
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USDJPY – The USDJPY triangle is in jeopardy as price creeps towards 118.51.We have been treating this rally as an E wave that will complete the triangle that began on 3/5, but 118.51 must remain solid.The triangle structure suggests that the next big move is down, below 115.15 towards potential trendline support drawn off of the January 2005 and May 2006 lows just below 114.00.Bollinger band width is the lowest since late February, just prior to the breakdown from 121.66 (tight Bollinger bands indicate breakout potential).A rally above 118.51 destroys the triangle and focus would shift to 119.17 – the 61.8% of 121.66-115.15.
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GBPUSD – We are looking higher in order for a 5th wave to complete a 5 wave bullish sequence that began at 1.9243.Wave 1 would equal wave 5 at 1.9798.Similar to the EURUSD, the decline from the recent high (1.9729) is in 3 waves and the A and C legs of the decline are nearly equal.We are looking for a significant top to form following one more rally but if the pair declines below 1.9436, then probability increases that a major top is already in place.
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USDCHF – The USDCHF is attempting to break higher, having rallied through 1.2180 resistance this morning.The short term subdivisions are not clear but the chart we showed a few days ago that depicts the entire decline from 1.2575 as a double zigzag correction remains valid. A break above potential trendline resistance drawn off of the 2/12 and 3/12 highs would increase confidence in the upside.
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USDCAD – the USDCAD continues to work towards channel support that we have focused on so there is no reason to alter our outlook.“This big decline is likely the C wave of an A-B-C decline from 1.1879.1.1512 is where the C wave decline would equal the A wave decline.Support is reinforced by the confluence of channel support / 11/21/2006 high at 1.1470.The pair is likely to chop lower to test the mentioned support near 1.1470/1.1512 before a major rally attempt.”
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AUDUSD –Focus remains on .8130 but the Aussie is nearing the latter stages of a long term rally.Daily RSI has crossed above and then below 70 (overbought) for the first time since November 2006.The rally from .7680 is in 5 waves and could be the end of the 5th wave in the 5 wave bullish sequence that began in April 2001 (see chart below).If this is the case, then we are near a major top and the next big move is towards .7000.There is no evidence yet that a top is in place – we’ll require a 5 wave decline (even at the smallest degree) in order to claim that a top is in place.
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NZDUSD – Kiwi has not moved much in the last 24 hours as price has been contained between .7168 and .7114.We continue to favor the longer term reversal scenario.Evidence that we have cited in recent days include extreme risk reversal rate, major resistance at .7200 and now we can add a potential head and shoulders reversal pattern, evident on intraday charts.A decline below .7081 would break the neckline and warrant a bearish bias.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-30-07techs8.gif
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EURUSD – See the previous day’s analysis for a longer term perspective on the EURUSD.Near term, the subdivisions impart a bullish tone.We focused on this yesterday and will again today.That is, the decline from 1.3413 to 1.3256 is in 3 waves and thus corrective.We proposed yesterday that the rally from 1.3256 to 1.3377 is either wave i or b.With the rally from 1.3302 taking on impulsive characteristics, we are expecting a break above 1.3377 and ultimately 1.3413 with 1.3302 holding as support.1.3483, the 3/11/2005 high, is potential resistance on a break above 1.3413.Coming under 1.3302 negates the bullish structure described above.
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USDJPY – The USDJPY is at a crossroads.The decline from 118.45 broke below triangle support momentarily before snapping back to above 117.00.As such, this rally is most likely the D wave that will complete the triangle that began on 3/5.This is what we are working with as long as 118.51 remains intact as resistance.The triangle structure suggests that the next big move is down, below 115.15 towards potential trendline support drawn off of the January 2005 and May 2006 lows just below 114.00.Bollinger band width is the lowest since late February, just prior to the breakdown from 121.66 (tight Bollinger bands indicate breakout potential).From a longer term perspective, the 20 day SMA recently crossed below the 200 day SMA (200 day SMA is resistance at 117.75).
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GBPUSD – We are still looking for one more high to be registered above 1.9729 before a big turn lower.We are looking higher in order for a 5th wave to complete a 5 wave bullish sequence that began at 1.9243.Wave 1 would equal wave 5 at 1.9823.The bullish structure is strong above 1.9569.The 3 wave setbacks from 1.9729 and 1.9726 both favor the short term bullish outlook.A break of the 1.9556/69 support area would warrant reconsideration of our position.
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USDCHF – The USDCHF continues to chop around between 1.2100 and 1.2200.Price has held below 20 day SMA and the hourly shows a possible head and shoulders continuation pattern.Resistance in the 1.2180 area has proved formidable thus far and 1.2080 has attracted buyers.A break of one of these levels would provide a directional bias.
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USDCAD – This big decline is likely the C wave of an A-B-C decline from 1.1879.1.1512 is where the C wave decline would equal the A wave decline.Support is reinforced by the confluence of channel support / 11/21/2006 high at 1.1470.RSI (daily) is nearing oversold territory and CCI (daily) is below -100.The pair is likely to chop lower to test the mentioned support near 1.1470/1.1512 before a major rally attempt.A rally through 1.1679 (3/13 low) suggests additional bullish potential.Near term, a triangle may be forming.In this case, the range will tighten with 1.1640 capping upside and 1.1529 capping the downside for the next few days.
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AUDUSD –Focus remains on .8130 but the Aussie is nearing the latter stages of a long term rally.Daily RSI has crossed above and then below 70 (overbought) for the first time since November 2006.The rally from .7680 is in 5 waves and could be the end of the 5th wave in the 5 wave bullish sequence that began in April 2001 (see chart below).If this is the case, then we are near a major top and the next big move is towards .7000.There is no evidence yet that a top is in place – we’ll require a 5 wave decline (even at the smallest degree) in order to claim that a top is in place.
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NZDUSD – We are continuing with the very short term analysis because it is possible that we are at a major turning point and we need to be precise in these instances.The 5 wave decline from .7207 argues that a top is in place.Further, the rally has faced supply at the previous 4th wave – a guideline in Elliott and a common occurrence.If a top is in place at .7207, then the next leg down would be a 3rd wave, which likely takes price close to .7000.A break below .7081 bolsters the call for another leg down..7207 is critical.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-29-07techs8.gif
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EURUSD – 1.3400 has proven formidable as resistance and there is no change in our outlook. “There is plenty of bearish evidence on the daily.RSI is divergent at the recent high and just declined below 70.CCI is above 100 and a decline below 100 would signal a reversal.Regarding the longer term structure, it is appropriate to treat the entire rally from 1.1640 as a 3 wave correction.There are 7 waves higher – but 7 divides into two 3 wave corrections linked together by an X wave.This is known as a double zigzag correction and is labeled W-X-Y.We are looking lower.It is possible that the rally extends higher but the oscillator action on the daily gives us reason to be skeptical.”That said, the shorter term structure remains bullish due to the 3 wave decline from 1.3413 to 1.3254.This evidence indicates that a rally above 1.3372 eventually leads to a break of 1.3413.Treat 1.3372 as the bullish pivot and 1.354 as the bearish pivot.
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USDJPY – The break below 117.39 as well as short term channel support favors our initial bearish outlook that treats the rally from 115.76 as corrective.We are now looking for the rally from 115.76 to be completely retraced but initial support is at 116.70/80 (potential triangle support).Former intraday support from last night is now resistance at 117.65 and bears are firmly in control as long as price remains below 118.01.
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GBPUSD – We are still looking for one more high to be registered above 1.9729 before a big turn lower.We are looking higher in order for a 5th wave to complete a 5 wave bullish sequence that began at 1.9243.Wave 1 would equal wave 5 at 1.9823.The bullish structure is strong above 1.9569.The 3 wave setbacks from 1.9729 and 1.9726 both favor the short term bullish outlook.
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USDCHF – The USDCHF dropped below our short term trendline and the rally from 1.2030 to 1.2230 is in just 3 waves.The evidence requires that we abandon our bullish stance.The 20 day has held as resistance as well (currently at 1.2189).The short term structure does not look too clear at this point but the aforementioned 3 wave rally suggests that the 1.2030 low will be tested again.
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USDCAD – This big decline is likely the C wave of an A-B-C decline from 1.1879.1.1512 is where the C wave decline would equal the A wave decline.Support is reinforced by the confluence of channel support / 11/21/2006 high at 1.1470.RSI (daily) is nearing oversold territory and CCI (daily) is below -100.The pair is likely to chop lower to test the mentioned support near 1.1470/1.1512 before a major rally attempt.A rally through 1.1679 (3/13 low) suggests additional bullish potential.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-28-07techs6.gif
AUDUSD –Focus remains on .8130 but the Aussie is nearing the latter stages of a long term rally.Daily RSI has crossed above and then below 70 (overbought) for the first time since November 2006.The rally from .7680 is in 5 waves and could be the end of the 5th wave in the 5 wave bullish sequence that began in April 2001 (see chart below).If this is the case, then we are near a major top and the next big move is towards .7000.There is no evidence yet that a top is in place – we’ll require a 5 wave decline (even at the smallest degree) in order to claim that a top is in place.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-28-07techs7.gif
NZDUSD – We showed the risk reversal chart yesterday, which is one of the main reasons that we are looking for a top.The pair was rejected at the .7200 figure and currently trades roughly 70 pips lower.Is this the turn?Maybe.A decline in the next few hours to below .7110 would make the decline from .7207 5 waves and suggest that this is indeed the turn.A rally above .7183 before a decline below .7110 would negate the call for a top.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-28-07techs8.gif
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EURUSD – The EURUSD has rallied off of the 1.3262 former resistance level (now support), but as long as 1.3413 holds as resistance, we’ll continue to favor the downside.There is plenty of bearish evidence on the daily.RSI is divergent at the recent high and just declined below 70.CCI is above 100 and a decline below 100 would signal a reversal.Regarding the longer term structure, it is appropriate to treat the entire rally from 1.1640 as a 3 wave correction.There are 7 waves higher – but 7 divides into two 3 wave corrections linked together by an X wave.This is known as a double zigzag correction and is labeled W-X-Y.We are looking lower.It is possible that the rally extends higher but the oscillator action on the daily gives us reason to be skeptical.
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USDJPY – It looks more and more likely that we will see a break above 118.50 and test the level where the rally from 115.76 would equal the 115.15-118.50 rally – at 119.12.This level is reinforced by the 61.8% of 121.66-115.15 at 119.16.Still, when viewed on an hourly chart, the structure of the rally from 115.76 is overlapping and corrective, which suggests that the entire rally should be retraced.
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GBPUSD – We are still looking for one more high to be registered above 1.9729 before a big turn lower.We are looking higher in order for a 5th wave to complete a 5 wave bullish sequence that began at 1.9243.Wave 1 would equal wave 5 at 1.9823.The bullish structure is strong above 1.9569.
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USDCHF – No change – “The USDCHF rally from 1.1877 to 1.2571 traced out 5 waves, meaning that the larger trend is up.Once 5 waves are completed, a correction should unfold in 3 waves.The correction that ensued was a complex one, known as a double zigzag (two a-b-c corrections connected with an X wave…labeled W-X-Y).Our confidence that a bottom is in place is improved due to the fact that the pair turned up from the 78.6% Fibonacci level of the 1.1877-1.2571 rally.The rally beginning now should eventually take out the January high at 1.2571.”Continue to favor the uspide as long as this short term trendline holds (see chart below).
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USDCAD – This big decline is likely the C wave of an A-B-C decline from 1.1879.1.1512 is where the C wave decline would equal the A wave decline.Support is reinforced by the confluence of channel support / 11/21/2006 high at 1.1470.RSI (daily) is nearing oversold territory and CCI (daily) is below -100.The pair is likely to chop lower to test the mentioned support near 1.1470/1.1512 before a major rally attempt.A rally through 1.1679 (3/13 low) suggests additional bullish potential.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-27-07techs6.gif
AUDUSD –Focus remains on .8130 but the Aussie is nearing the latter stages of a long term rally.Daily RSI is oversold for the first time since November 2006.The AUDUSD pushed above .8096 yesterday to register a new high at .8111 in what may be a 5th wave.Coming under .8027 signals a reversal.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-27-07techs7.gif
NZDUSD – Kiwi continues to rally and the break above .7162 exposes the next level of chart resistance at .7202 (12/5/2005 high).The rally is certainly getting extended as evidenced by the risk reversal rate on 1 month options (call price – put price) is the highest since November 2004.Kiwi topped out near .7300 then.Coming under .7083 indicates bearish potential (possibly a major reversal).Divergence with oscillators on the daily suggests reversal potential as well.The chart we are showing this morning is the Kiwi daily chart with the risk reversal rate.An extreme RR rate leads to a reversal.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-27-07techs8.gif
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-27-07techs9.gif
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