EURUSD – We said Friday that “Risk is quickly shifting to the downside.EURUSD may be at a major turning point.”Last week’s candle traced out a shooting star (long upper wick …a bearish reversal candle).The short term structure remains bearish below 1.3144 but 1.3300 should offer resistance as this level was previously support.A sustained break below 1.3262 would increase confidence in the bearish case and target 1.3188.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-26-07techs2.gif
USDJPY – As long as 118.51 holds as resistance, the triangle structure remains intact and we are looking for a decline towards triangle support near 116.50.However, with the pair refusing to hold below 118.00 and price remaining above the 200 day sma, we have to consider other alternatives.A break above 118.50 exposes 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.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-26-07techs3.gif
GBPUSD – From Friday, “we are expecting a pullback with support at 1.9556 (prior 4th wave).1.9693 is most likely the top of wave B within an A-B-C correction that began at 1.9729.We are looking for a C wave to complete the 4th wave correction and end near 1.9556.”With the pair bouncing at 1.9569 this morning and the decline from 1.9729 looking corrective, there is little reason to change our outlook for one more new high (above 1.9729).If price comes under 1.9569, then the next support is at the 38.2% of 1.9213-1.9729 at 1.9531.Regarding the longer term trend, only a decline below 1.9436 indicates additional bearish potential.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-26-07techs4.gif
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.”
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-26-07techs5.gif
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/03-26-07techs6.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.Similar to Cable, we are looking for a corrective wave 4 followed by a thrust higher in wave 5 in order to complete the 5 wave bullish sequence that began at .7680.Wave 4 may very well be over at .8027 and a break above .8096 confirms this.Again, we are looking for another rally with focus on .8130 – and then a reversal.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-26-07techs7.gif
NZDUSD – Kiwi continues to rally and looks poised to take out the 3/23 high at .7162.The rally is certainly getting extended as evidenced by the risk reversal rate on 1 month options (call price – put price) is the highest that is has ever been.The previous high for the RR rate occurred in early January of this year when Kiwi topped out at .7097.A break above .7162 exposes the next level of chart resistance at .7202 (12/5/2005 high).Coming under .6991 indicates bearish potential (possibly a major reversal).Divergence with oscillators on the daily suggests reversal potential as well.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-26-07techs8.gif
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EURUSD – “Risk is quickly shifting to the downside.Daily RSI is divergent at the new high and yesterday’s candle was close to being a bearish engulfing pattern.”We are showing a very short term chart this morning since the EURUSD may be at a major turning point.Notice that there are 5 waves down from 1.3412 to 1.3302.This suggests that once this bounce is finished, another 5 wave decline will occur.Resistance is at the 61.8% of this short term decline at 1.3370.More bearish prospects come to the forefront on a break below the 2/27 high at 1.3262.
Key Levels & Technical Indicators
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/20070323_DT_Pic2.jpg
USDJPY – As long as 118.51 holds as resistance, the triangle structure remains intact and the next move of consequence should be down towards triangle support near 116.50.The turn lower from the top of the triangle last night increases confidence that the pair is headed towards 116.50.117.84 is short term resistance.
Key Levels & Technical Indicators
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/20070323_DT_Pic3.jpg
GBPUSD – Little is changed since yesterday.We have labeled the rally from 1.9213 as a 3rd wave rally, so we are expecting some pullback with support at 1.9556 (prior 4th wave).1.9693 is most likely the top of wave B within an A-B-C correction that began at 1.9729.We are looking for a C wave to complete the 4th wave correction and end near 1.9556.1.9693 is short term resistance.
Key Levels & Technical Indicators
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/20070323_DT_Pic4.jpg
USDCHF – 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.
Key Levels & Technical Indicators
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/20070323_DT_Pic5.jpg
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.
Key Levels & Technical Indicators
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/20070323_DT_Pic6.jpg
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.Similar to Cable, we are looking for a corrective wave 4 followed by a thrust higher in wave 5 in order to complete the 5 wave bullish sequence that began at .7680.Support is estimated at .7970.For more, see http://www.dailyfx.com/story/charting_center/weekly_chart_analysis/AUDUSD___This_Weeks_Technical_1174062470292.html
Key Levels & Technical Indicators
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/20070323_DT_Pic7.jpg
NZDUSD – Kiwi continues to head north, having rallied for 8 consecutive days now (if today’s gains hold up).We went back and did some statistical work and found that 8 consecutive days of gains in NZDUSD has happened on only 2 occasions in the last 10 years.From 4/25/2003 to 5/6/2003 and from 1/30/2004 to 2/11/2004. In the former instance, the next day did see a decline but the uptrend remained intact.In the latter instance, a major reversal took place.The rally is certainly getting extended as evidenced by the risk reversal rate on 1 month options (call price – put price) is the highest that is has ever been.The previous high for the RR rate occurred in early January of this year when Kiwi topped out at .7097.A break above .7127 exposes the next level of chart resistance at .7202 (12/5/2005 high).Coming under .6991 indicates bearish potential (possibly a major reversal).
Key Levels & Technical Indicators
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/20070323_DT_Pic18.jpg
Intra-Day Pivot Points
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/20070323_DT_Pic9.jpg
Glossary of Terms
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EURUSD – We remarked yesterday that “this correction should give way to a rally above 1.3344 with a target at 1.3387 (where wave 1 would equal wave 5)” .The EURUSD surpassed our target and made it to 1.3413 last night.The 5th wave may not be complete since the rally from 1.3271 consists of just 3 waves.As long as the pair remains above 1.3325, the possibility remains that the EURUSD could rally once more to above 1.3413.However, risk is quickly shifting to the downside.Daily RSI is divergent at the new high as well.Next support is at 1.3271.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-22-07techs2.gif
USDJPY – As long as 118.04 holds as resistance, the triangle structure remains intact and the next move of consequence should be down towards triangle support near 116.50.Coming under 117.39 would increase confidence in the bearish outlook.A break above 118.04 gives scope to a test of 119.11, which is where the 115.15-118.51 rally would equal the rally from 115.76.Price is at the 20 day SMA, which should offer some resistance.Again, 118.04 is the line in the sand.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-22-07techs3.gif
GBPUSD – We have been looking higher but may not have been bullish enough given that Cable has rallied for 6 consecutive days (today would be the 7th).The pair is just shy of the February high at 1.9750, which should offer some resistance.We have labeled the rally from 1.9213 as a 3rd wave rally, so we are expecting some pullback with support at 1.9570 (prior 4th wave).
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-22-07techs4.gif
USDCHF – 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.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-22-07techs5.gif
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.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-22-07techs6.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.Similar to Cable, we see a corrective wave 4 followed by a thrust higher in wave 5 in order to complete the 5 wave bullish sequence that began at .7680.Support is estimated at .7970.For more, see http://www.dailyfx.com/story/charting_center/weekly_chart_analysis/AUDUSD___This_Weeks_Technical_1174062470292.html
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-22-07techs7.gif
NZDUSD – We wrote yesterday “that we look for the NZDUSD to at least challenge .7116 (.6943 + (.7007 - .6833)) before a setback takes place.”The Kiwi has challenged this figure, rallying to .7126 this morning, one pip shy of the 1/26 high at .7127.A break above .7127 exposes the next level of chart resistance at .7202 (12/5/2005 high).Support should be strong at .7036.As long as price remains above .6991, the overall structure remains bullish for a test of .7200.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-22-07techs8.gif
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EURUSD – The consolidation that has taken place since the 1.3344 high on 3/16 is most likely a 4th wave correction.This correction should give way to a rally above 1.3344 with a target at 1.3387 (where wave 1 would equal wave 5).This is just above the 1.3370 peak.Channel support is just below current price at about 1.3283.Only a decline below 1.3188 changes the bias to a bearish one.Ideally, 1.3254 holds as support.In summary, we continue to look higher.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-21-07techs2.gif
USDJPY – As long as 118.04 holds as resistance, the triangle structure remains intact and the next move of consequence should be down towards triangle support near 116.50.Coming under 117.39 would increase confidence in the bearish outlook.A break above 118.04 gives scope to a test of 119.11m which is where the 115.15-118.51 rally would equal the rally from 115.76.Price is at the 20 day SMA, which should offer some resistance.Again, 118.04 is the line in the sand.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-21-07techs3.gif
GBPUSD – The rally from 1.9213 to 1.9613 is either a 3rd wave advance or a C wave advance.Since the rally is a 161.8% extension of 1.9183-1.9436 / 1.9213, we are favoring the 3rd wave scenario.This means that a correction (likely underway right now) will be a 4th wave and give way to a new high above 1.9654 with focus on 1.9675.This morning’s low at 1.9556 is just above the 23.6% of 1.9213-1.9654 at 1.9551.We are looking for this low to hold.If it fails, then potential support is not until the 38.2% at 1.9486.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-21-07techs4.gif
USDCHF – The USDCHF pattern is clearing up a bit.A rally above 1.2163 would make 5 waves up from 1.2030 and turn the larger trend higher.Divergence with daily oscillators at the recent low also favor a turn higher.Short term support is at 1.2109 and 1.2030 needs to hold for a bullish outcome to remain favored.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-21-07techs5.gif
USDCAD – The USDCAD is likely to make another low below 1.1598 before a more pronounced rally.The way in which that rally unfolds will determine whether or not we remain bullish or turn bearish.This big decline could be a C wave of a correction (favored view) but 1.1564 must hold.If 1.1564 is broken, then focus shifts to channel support at 1.1462 (support increases about 2 pips per day).
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-21-07techs6.gif
AUDUSD –We remarked yesterday that “the AUDUSD may be in the verge of breaking above long term resistance at .8003.Near term, the rally from .7798 is in 5 waves and 240 minute RSI is overbought and exhibits bearish divergence.A corrective setback may be in order before a serious challenge of .8003 occurs.The uptrend remains healthy as long as the 3/13 high at .7887 remains intact.”After slipping to .7963, the AUDUSD has rallied back above the .8000 figure and focus is on .8130 (see http://www.dailyfx.com/story/charting_center/weekly_chart_analysis/AUDUSD___This_Weeks_Technical_1174062470292.html)
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-21-07techs7.gif
NZDUSD – The Kiwi is strong and may be in a 3rd wave (or C wave) rally that began at .6943.In this case, we look for the NZDUSD to at least challenge .7116 (.6943 + (.7007 - .6833)) before a setback takes place.Remaining above .6943 is key for the near term bullish case.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-21-07techs8.gif
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EURUSD – The dip that we were looking for to the 1.3280 area (1.3271 was the low today) has happened and we are looking for a rally to above 1.3344 in a 5th wave advance.The bullish structure remains intact as long as price remains above 1.3188 but channel support should be strong near 1.3250.Once a 5th wave is complete above 1.3344 (and possibly 1.3370), a major turn lower is expected.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-20-07techs2.gif
USDJPY – We’ll reiterate our comments from yesterday.“We continue to favor the triangle scenario.The rally that began at 115.76 is likely the C wave of the triangle that could challenge 118.28 (116.24 + (117.80 – 115.76)).As long as the current rally ends before 118.51, the triangle structure is intact.After the C wave rally ends before 118.51, we are looking for a decline to triangle support in a D wave to around 116.50.”It is highly possible that the C wave of the triangle ended last night at 118.04 (also the 20 day SMA), so we are looking for a test of triangle support near 116.50.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-20-07techs3.gif
GBPUSD – The Cable rally has extended past 1.9507 and tested the 78.6% of 1.9675-1.9184 at 1.9569.As long as price remains below 1.9675, the rally from 1.9184 can be classified as an A-B-C correction.However, the retracement is deep and price needs to turn lower very soon for a bearish outcome to remain favored.A rally above 1.9675 would suggest that the decline from 1.9915 was corrective and that price is headed to a new high (above 1.9915).The bullish structure remains intact as long as price remains above 1.9436.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-20-07techs4.gif
USDCHF – The USDCHF pattern does not look clear at the moment.The pair has bounced off of the lower Bollinger band (daily) and resistance is at the 20 day SMA at 1.2220.Daily oscillators are divergent at the recent low, which is now healthy for the bearish case.With a possible 5 wave bearish sequence complete at 1.2030, a bounce could extend to the 38.2% of 1.2575-1.2030 at 1.2237.Again, the pattern is not clear at the moment and there is little confidence regarding directionality.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-20-07techs5.gif
USDCAD – The USDCAD has plunged this morning.This type of price action is almost always a 3 or C wave.In this case, it is highly probable that the current decline is a C wave that will complete a 3 wave correction of the 1.1564-1.1828 rally.Support is at 1.1642, which is where the decline from 1.1790 will equal the 1.1828-1.1679 decline.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-20-07techs6.gif
AUDUSD –We remarked yesterday that “the AUDUSD may be in the verge of breaking above long term resistance at .8003.Near term, the rally from .7798 is in 5 waves and 240 minute RSI is overbought and exhibits bearish divergence.A corrective setback may be in order before a serious challenge of .8003 occurs.The uptrend remains healthy as long as the 3/13 high at .7887 remains intact.”After slipping to .7963, the AUDUSD has rallied back above the .8000 figure and focus is on .8130 (see http://www.dailyfx.com/story/charting_center/weekly_chart_analysis/AUDUSD___This_Weeks_Technical_1174062470292.html)
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-20-07techs7.gif
NZDUSD – The Kiwi is strong and may be in a 3rd wave (or C wave) rally that began at .6943.In this case, we look for the NZDUSD to at least challenge .7116 (.6943 + (.7007 - .6833)) before a setback takes place.Remaining above .6943 is key for the near term bullish case.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-20-07techs8.gif
EURUSD – “With 5 waves up from 1.3193, a correction lower is the most likely scenario with support at the 4th wave low at 1.3280.This level is reinforced by the 38.2% of 1.3193-1.3343 at 1.3286.”The decline from 1.3343 is a clear 3 wave correction, which keeps us looking higher.Former resistance at 1.3254 should be solid support.1.3370 is in play on a rally through 1.3343
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-19-07techs2.gif
USDJPY – We continue to favor the triangle scenario.The rally that began at 115.76 is likely the C wave of the triangle that could challenge 118.28 (116.24 + (117.80 – 115.76)).As long as the current rally ends before 118.51, the triangle structure is intact.After the C wave rally ends before 118.51, we are looking for a decline to triangle support in a D wave to around 116.50.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-19-07techs3.gif
GBPUSD – The Cable rally has held at the confluence of the 20 day SMA / 61.8% of 1.9675-1.9184 at 1.9485.As long as the pair remains below 1.9507, the reversal scenario that we proposed Friday remains favored.Coming under 1.9384 would increase confidence in the bearish outlook.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-19-07techs4.gif
USDCHF – The USDCHF has rallied off of the lower Bollinger band (daily) to former support (now resistance) from the 3/14 low at 1.2104.The rally from 1.2030 has taken on an impulsive nature and a setback would potentially be a 4th wave correction.A break above the short term trendline shown below opens up the door to the 3/15 high at 1.2217.Price above 1.2187 warrants a short term bullish bias.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-19-07techs5.gif
USDCAD – We are suspending the longer term bearish outlook due to the impulsive rally off of 1.1679.We wrote yesterday that“the fact that this decline has yet to accelerate lower and the bullish divergence with RSI on the hourly are both causes for concern and a bounce to 1.1739 or higher is suggested near term by the 5 waves down from 1.1820.”A small 5 wave rally from 1.1679 to 1.1765 is evident with the chop lower undoubtedly corrective.Price is now likely to exceed 1.1879 is a 3rd wave and target the 1.2000 figure (61.8% of 1.2734-1.0927 at 1.2041) in coming weeks.Then, we will look for the BIG turn lower.Remaining above 1.1679 keeps the outlook intact.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-19-07techs6.gif
AUDUSD –The AUD/USD has tested the 1/3 high at .7982.Ultimately, the AUDUSD may be in the verge of breaking above long term resistance at .8003.Near term, the rally from .7798 is in 5 waves and 240 minute RSI is overbought and exhibits bearish divergence.A corrective setback may be in order before a serious challenge of .8003 occurs.The uptrend remains healthy as long as the 3/13 high at .7887 remains intact.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-19-07techs7.gif
NZDUSD – Kiwi’s rally has not been as impressive as the Aussie but the pair has broken above the .7000 figure.A measured objective lies at .7104, which is where the rally from .6832 would equal the .6720-.6991 rally.This is also just below the 2/26 high at .7126.The bullish outlook remains intact as long as .6943 remains solid (as support).
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-19-07techs8.gif
EURUSD – The break above 1.3262 negated the bearish structure and focus in now on the December high at 1.3370.With 5 wavesup from 1.3193, a correction lower is the most likely scenario with support at the 4th wave low at 1.3280.This level is reinforced by the 38.2% of 1.3193-1.3343 at 1.3286.When viewed on a weekly chart, it is possible that the EURUSD is tracing out what is known as a double zigzag pattern from the 1.1640 low.Viewed in this context, a measured objective is at 1.3740 (which is where the 1.2483-1.3370 rally would equal the rally from 1.2866).A bearish outcome is still possible with 1.3370 intact but price is very close to that level.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-16-07techs2.gif
USDJPY – We mentioned yesterday that “if 118.51 holds, then a triangle may be forming.In order to consolidate the sharp drop from 121.66, a triangle scenario is certainly possible.”It certainly looks as if a triangle is forming with the current decline as the d wave of the triangle.We are looking for the pair to come down to the 116.00 area and rally in the final leg of the triangle before breaking lower and coming under 115.15.
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GBPUSD – We said yesterday that“a push above 1.9436 would complete the pattern and give way to a decline that comes under 1.9184.The A and C legs of the correction would be equal at 1.9465 and the 61.8% of 1.9675-1.9184 is at 1.9486.That, level, 1.9465/86 is where we are looking for a top in Cable.The GBPUSD rally extended to 1.9501 and just completed a reverse hammer on the hourly.We like the topping scenario but price must come under 1.9396 in order to confirm that the pair has ‘topped’.If 1.9501 fails as resistance, then the next level to watch is the 78.6% of 1.9675-1.9181 at 1.9569.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-16-07techs4.gif
USDCHF – We mentioned yesterday that“a 5 wave decline is evident from 1.2357 to 1.2213, meaning that the larger trend is now down.”Like the euro, but in the inverse, there are a clear 5 waves down from 1.2217, so at least a correction is due.Resistance is at the 38.2% of 1.2217-1.2029 at 1.2101 and the confluence of the 50% of 1.2217-1.2029 / wave 4 high at 1.2123.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-16-07techs5.gif
USDCAD – We are suspending the longer term bearish outlook due to the impulsive rally off of 1.1679.We wrote yesterday that“the fact that this decline has yet to accelerate lower and the bullish divergence with RSI on the hourly are both causes for concern and a bounce to 1.1739 or higher is suggested near term by the 5 waves down from 1.1820.”A small 5 wave rally from 1.1679 to 1.1765 is evident with the chop lower undoubtedly corrective.Price is now likely to exceed 1.1879 is a 3rd wave and target the 1.2000 figure (61.8% of 1.2734-1.0927 at 1.2041) in coming weeks.Then, we will look for the BIG turn lower.Remaining above 1.1679 keeps the outlook intact.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-16-07techs6.gif
AUDUSD –The AUD/USD has soared past .7950 and focus is now on the 1/3 high at .7982.Daily oscillators are rising but not yet overbought, indicating that this rally may very well extend.The chart below is telling, ultimately, the AUDUSD may be in the verge of breaking above this long term triangle.A break above this triangle, and the psychological .8000 figure could be violent.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-16-07techs7.gif
NZDUSD – Kiwi’s rally has not been as impressive as the Aussie but the pair is on the verge of breaking through the 3/13 high at .6991.A measured objective lies at .7104, which is where the rally from .6832 would equal the .6720-.6991 rally.This is also just below the 2/26 high at .7126.The bullish outlook remains intact as long as .6833 remains solid (as support).
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-16-07techs8.gif
EURUSD – The hourly channel continues to hold up, which does not inspire much confidence in the bearish bias.That, and the fact that this morning’s decline is in just 3 waves, increases upside risk.However, the longer term bearish structure (where we are looking for a C wave to come under 1.2865) remains in place as long as 1.3262 remains intact.A break under 1.3188 would bolster the bearish case.
Key Levels & Technical Indicators
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/daily_tech_3_15_3.gif
USDJPY – The USDJPY rally has stalled at the 61.8% of 118.51-115.76 at 117.46 (also the 200 day SMA at 117.63).However, 5 short term waves up from 115.76 indicates bullish potential.Short term support is at 117.01 (today’s low), and a break above 117.60 gives scope to 118.51.If 118.51 holds, then a triangle may be forming.In order to consolidate the sharp drop from 121.66, a triangle scenario is certainly possible.
Key Levels & Technical Indicators
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/daily_tech_3_15_4.gif
GBPUSD – Cable remains in corrective mode (consolidating the 1.9675-1.9184 decline).Yesterday’s sharp rally is indicative of a C wave, which is the final wave in a 3 wave correction.A push above 1.9436 would complete the pattern and give way to a decline that comes under 1.9184.The A and C legs of the correction would be equal at 1.9465 and the 61.8% of 1.9675-1.9184 is at 1.9486.That, level, 1.9465/86 is where we are looking for a top in Cable.
Key Levels & Technical Indicators
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/daily_tech_3_15_5.gif
USDCHF – We mentioned yesterday that“a 5 wave decline is evident from 1.2357 to 1.2213, meaning that the larger trend is now down.”The USDCHF is rolling over from current price, which is the 38.2% of 1.2358-1.2104 at 1.2200.Coming under 1.2157 increases confidence in a bearish outcome and decline below 1.2104.Short term resistance is at the 61.8% of 1.2358-1.2104 at 1.2261.
Key Levels & Technical Indicators
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/daily_tech_3_15_6.gif
USDCAD – We are suspending the longer term bearish outlook due to the impulsive rally off of 1.1679.We wrote yesterday that“the fact that this decline has yet to accelerate lower and the bullish divergence with RSI on the hourly are both causes for concern and a bounce to 1.1739 or higher is suggested near term by the 5 waves down from 1.1820.”A small 5 wave rally from 1.1679 to 1.1765 is evident with the chop lower undoubtedly corrective.Price is now likely to exceed 1.1879 is a 3rd wave and target the 1.2000 figure (61.8% of 1.2734-1.0927 at 1.2041) in coming weeks.Then, we will look for the BIG turn lower.Remaining above 1.1679 keeps the outlook intact.
Key Levels & Technical Indicators
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/daily_tech_3_15_7.gif
AUDUSD –The AUD/USD continues to work higher.Bearish RSI divergence on the hourly is disconcerting to bulls but only a break below .7797 suggests additional bearish potential.Short term support is at today’s low at .7839.A rally above .7897 brings .7950 into focus.
Key Levels & Technical Indicators
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/daily_tech_3_15_8.gif
NZDUSD – Kiwi’s bounce from the short term trendline (drawn off of the 3/6 and 3/7 lows) has extended through the 3/13 low at .6918, which dampens the near term bearish outlook.Still, price is holding below the 20 day SMA, which is just above current price at .6945.Another test of trendline support could lead to a break and new lows below .6719..6991 is resistance.
Key Levels & Technical Indicators
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/daily_tech_3_15_9.gif
Intra-Day Pivot Points
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/daily_tech_3_15_10.gif
EURUSD – The EURUSD range has tightened to 1.3180-1.3220 as yesterday’s rally was rejected at the 78.6% of 1.3262-1.3072 at 1.3224.We have focused on the possibility that a 3 wave correction is unfolding from the 3/5 low at 1.3072.The 3rd leg of that correction (the c wave), consists of 5 waves from 1.3084 (see chart below).If our confidence in a bearish outcome is to remain high, then 1.3224 needs to hold as resistance.The pair has come under a short term supporting trendline, which increases confidence (that the pair is topping).Short term support is at 1.3156.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-14-07techs2.gif
USDJPY – We said yesterday that “the break below 116.91 (just now) reinforces the bearish bias as the entire rally from 115.15 can now be classified as an A-B-C correction.Weakness should continue lower in a 5th wave to below 115.15.Support on a break below the 115.00 figure is the 12/5/2006 low at 114.44.”We’ll hold onto this view and see resistance at a short term trendline that comes in at 116.40/50.Key resistance for the short term bearish bias is the 3/12 low at 117.22.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-14-07techs3.gif
GBPUSD – Little has changed regarding Cable.The pair has rolled over from the 50% of 1.9675-1.9182 at 1.9428.It is possible to count a 3 wave correction from 1.9182 (which makes up a 4th wave correction).What we are looking for this decline to continue to under 1.9182 in a 5th wave decline.Very short term resistance is at 1.9266.This level needs to hold in order to keep the most aggressive bearish count intact.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-14-07techs4.gif
USDCHF – We mentioned yesterday that“a 5 wave decline is evident from 1.2357 to 1.2213, meaning that the larger trend is now down.”An ending diagonal looks like it is taking shape in a small degree 5th wave.This means that the bounce from 1.2143 may test short term channel resistance near 1.2200 before price comes under 1.2143 in order to complete a 5 wave bearish sequence from 1.2355.1.2109 is support with a break lower targeting 78.6% of 1.1878- 1.2575 at 1.2028.Coming under 1.2143 satisfies minimum expectations for the short term decline so a larger correction may take place (back to 1.2250/60 – previous 4th wave) following a break below 1.2143.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-14-07techs5.gif
USDCAD – We are suspending the longer term bearish outlook due to the impulsive rally off of 1.1679.We wrote yesterday that“the fact that this decline has yet to accelerate lower and the bullish divergence with RSI on the hourly are both causes for concern and a bounce to 1.1739 or higher is suggested near term by the 5 waves down from 1.1820.”A small 5 wave rally from 1.1679 to 1.1765 is evident with the chop lower undoubtedly corrective.Price is now likely to exceed 1.1879 is a 3rd wave and target the 1.2000 figure (61.8% of 1.2734-1.0927 at 1.2041) in coming weeks.Then, we will look for the BIG turn lower.Remaining above 1.1679 keeps the outlook intact.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-14-07techs6.gif
AUDUSD –“A rally above .7880 would place 5 waves up from .7680 and possibly see a test of the 78.6% of .7950-.7680 at .7892.In this instance, we would be looking for a corrective move lower.”The correction lower is underway as evidenced by the impulsive decline from .7887.Short term, we should see a break below .7798 and potentially a test of the 61.8% of .7680-.7888 at .7759..7887 needs to hold in order to keep the short term bearish structure intact.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-14-07techs7.gif
NZDUSD – Kiwi’s bounce from .6833 this morning is most likely a corrective 4th wave that should give way to a 5th wave down to below .6833 in the near term.The pair needs to remain below .6918 in order to keep the bearish bias at the forefront.Longer term, weakness likely extends below .6720 with .6991 resistance remaining intact.Daily oscillators are rolling over and the 20 day SMA has contained rallies this week.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-14-07techs8.gif
EURUSD – The EURUSD continues to range primarily between 1.3100 and 1.3200.The 61.8% of 1.3262-1.3072 at 1.3189 has held (price has tested 1.3200 but backed off).If a 3 wave correction is unfolding from the 3/5 low at 1.3072, then the first and third legs of that correction are equal at 1.3200 (today’s high).Additional resistance is from the 78.6% of 1.3262-1.3072 at 1.3221.The inability of bears to keep EURUSD sub 1.3150 limits confidence in the downside near term but 1.3186-1.3221 should be formidable resistance.1.3262 must hold in order to maintain a bearish bias.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-13-07techs2.gif
USDJPY – The break below 116.91 (just now) reinforces the bearish bias as the entire rally from 115.15 can now be classified as an A-B-C correction.Weakness should continue lower in a 5th wave to below 115.15.Support on a break below the 115.00 figure is the 12/5/2006 low at 114.44.The bearish bias remains strong as long as price holds below 117.79.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-13-07techs3.gif
GBPUSD – Little has changed regarding Cable.The pair has rolled over from the 50% of 1.9675-1.9182 at 1.9428.It is possible to count a 3 wave correction from 1.9182 (which makes up a 4th wave correction).What we are looking for then is a decline from near current levels to under 1.9182 in a 5th wave decline.A rally above 1.9436 could test the 61.8% of 1.9675-1.9428 at 1.9486.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-13-07techs4.gif
USDCHF –The USDCHF is no longer bullish as price has held below the breakout point at 1.2264.Also, a 5 wave decline is evident from 1.2357 to 1.2213, meaning that the larger trend is now down.1.2264 is now resistance and the next bearish target is the 3/8 low at 1.2159.The pair has come under the 20 day SMA as well as a short term support line drawn off of the 3/5 and 3/8 lows (this reinforces the bearish bias).
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-13-07techs5.gif
USDCAD – The long term bearish bias remains intact.The decline off of the top of the 2 year channel combined with the outside monthly reversal favor the downside.Ultimately the decline from 1.1879 should come under 1.0927 to complete a 5th wave.The rally from 1.1564 has retraced 78.6% of the 1.1879-1.1564 decline in a 2nd wave.The next few weeks should see price come under 1.1564 and possibly even 1.1250-1.1326 – which marks the 138.2% to 161.8% extensions of 1.1879-1.1564 / 1.1761.1.1880 is critical resistance.The fact that this decline has yet to accelerate lower and the bullish divergence with RSI on the hourly are both causes for concern and a bounce to 1.1739 or higher is suggested near term by the 5 waves down from 1.1820.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-13-07techs6.gif
AUDUSD – The AUDUSD is supported by a short term trendline that began on 3/5.The pair may be finishing of a 5 wave rally from .7680.A rally above .7880 would place 5 waves up from .7680 and possibly see a test of the 78.6% of .7950-.7680 at .7892.In this instance, we would be looking for a corrective move lower.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-13-07techs7.gif
NZDUSD – Kiwi’s rally has stalled at the confluence of the 61.8% of .7126-.6719 / former congestion at .6970/90.In Kiwi’s case, it looks like there are already 5 waves up from the low put in place on 3/6 at .6719.With 5 waves up from .6719, the bigger picture is clouded but we are still looking for at least a test of .6892 as long as .6993 resistance holds.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-13-07techs8.gif
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-13-07techs9.gif
EURUSD – The EURUSD continues to range primarily between 1.3100 and 1.3200.The pair appears to be working its way up to the confluence of the 61.8% of 1.3262-1.3072 / 3/7 high at 1.3188/89.If a 3 wave correction is unfolding from the 3/5 low at 1.3072, then the first and third legs of that correction would be equal at 1.3200.Additional resistance is from the 78.6% of 1.3262-1.3072 at 1.3221.The inability of bears to keep EURUSD sub 1.3150 limits confidence in the downside near term but 1.3186-1.3221 should be formidable resistance.1.3262 must hold in order to maintain a bearish bias. http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-12-07techs2.gif
USDJPY – As mentioned here Friday, a rally to 117.63 / 118.00 (117.98 is where the rally from 116.20 would equal the 115.15-116.91 rally) would possibly complete a 4th wave correction and give way to another bout of weakness to below 115.15.The USDJPY tested 118.50 today but the bearish bias remains intact as long as 118.99 holds (as resistance).
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-12-07techs4.gif
GBPUSD – Cable has rolled over from the 50% of 1.9675-1.9182 at 1.9428.It is possible to count a 3 wave correction from 1.9182 as part of a larger 4th wave correction.What we are looking for then is a decline from near current levels to under 1.9182 in a 5th wave decline.A rally above 1.9436 could test the 61.8% of 1.9675-1.9428 at 1.9486.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-12-07techs5.gif
USDCHF –The next move of consequence should be in a wave C rally (inverse of EURUSD) to above 1.2575.The push through Friday’s high at 1.2264 bolsters the bullish scenario.Former resistance at 1.2264 is now support and this morning’s decline is coming up on this level.1.2264 needs to hold in order to keep the most bullish count intact.A decline below 1.2264 would cloud the picture and force a neutral bias.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-12-07techs6.gif
USDCAD – The long term bearish bias remains intact.The decline off of the top of the 2 year channel combined with the outside monthly reversal favor the downside.Ultimately the decline from 1.1879 should come under 1.0927 to complete a 5th wave.The rally from 1.1564 has retraced 78.6% of the 1.1879-1.1564 decline in a 2nd wave.The next few weeks should see price come under 1.1564 and possibly even 1.1250-1.1326 – which marks the 138.2% to 161.8% extensions of 1.1879-1.1564 / 1.1761.1.1880 is critical resistance.A push above, while not expected, targets the 1.2000 figure.The decline below 1.1731 grants confidence to the bearish case.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-12-07techs7.gif
AUDUSD – The AUDUSD remains range bound between .7700 and .7950.However, the pair has stalled at the 61.8% of .7950-.7680 at .7846.The 20 day SMA at .7841 reinforces resistance at this juncture.A decline below .7798 warrants a bearish bias.If .7848 fails as resistance, then a rally could stretch to the 78.6% at .7892.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-12-07techs8.gif
NZDUSD – Kiwi has also corrected recent weakness from .6720 in a 4th wave.The 78.6% at .6967 should be formidable resistance.The bearish structure remains intact as long as price remains below .6970.A decline below .6862 increases confidence in the bearish bias.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-12-07techs9.gif
EURUSD – The EURUSD rally has extended further than anticipated but the pair has turned down from the confluence of the 61.8% fibo of 1.3262-1.3072 / short term trendline at 1.3188.The current level is critical (1.3140).This was previous resistance and is now proving as support.A sustained break below 1.3140 returns confidence to the bearish case that we have focused on recently.1.3188 needs to hold in order to keep the immediate bearish structure intact and 1.3262 is critical to the intermediate bearish outlook.Reinforcing the bearish outlook is the head and shoulders pattern on the hourly.Coming under 1.3072 completes this pattern and shifts focus to 1.2865.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-08-07techs2.gif
USDJPY – As mentioned here yesterday, a rally to 117.63 / 118.00 (117.98 is where the rally from 116.20 would equal the 115.15-116.91 rally) would possibly complete a 4th wave correction and give way to another bout of weakness to below 115.15.However, the pair may top out closer to current price.The 115.15-116.91 rally is wave A in a 3 wave correction and the decline to 115.53 this morning was wave B.The current rally is wave C and would equal wave A at 117.31 (close to current price).Hourly RSI is nearing overbought territory so look for the pair to roll over close to 117.31/63.Coming under 116.91 increases confidence in a 5th wave decline to below 115.15.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-08-07techs3.gif
GBPUSD – We still contend that a small degree wave 4 likely ended at 1.9361 yesterday.1.9361 is the 38.2% of 1.9655-1.9183 and the correction from 1.9183 is in 3 waves with waves A and C of that correction roughly equal (1.9183-1.9307 = 124 pips : 1.9229-1.9361 = 132 pips).Price should come under 1.9183 with 1.9361 resistance remaining intact.A break below 1.9183 may test the 61.8% of 1.8515-1.9915 at 1.9055.However, a decline below 1.9183 satisfies minimum expectations for the 5th wave.Since GBPUSD is in a wave 5 (compared to EURUSD in a wave 3), expect a correction back to 1.9360’sh once a wave low is established.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-08-07techs4.gif
USDCHF – Little is changed regarding the USDCHF.We still favor the bottoming scenario with risk at 1.2109.The next move of consequence should be in a wave C rally (inverse of EURUSD) to above 1.2575.A push through Friday’s high at 1.2264 bolsters the bullish scenario.Daily CCI has increased from below -100, which signals a reversal (higher). A reverse head and shoulders on the hourly gives scope to a rally attempt from close to current price.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-08-07techs5.gif
USDCAD – The long term bearish bias remains intact.The decline off of the top of the 2 year channel combined with the outside monthly reversal favor the downside.Ultimately the decline from 1.1879 should come under 1.0927 to complete a 5th wave.The rally from 1.1564 has retraced 78.6% of the 1.1879-1.1564 decline in a 2nd wave.The next few weeks should see price come under 1.1564 and possibly even 1.1250-1.1326 – which marks the 138.2% to 161.8% extensions of 1.1879-1.1564 / 1.1761.1.1880 is critical resistance.A push above, while not expected, targets the 1.2000 figure.Coming under yesterday’s low at 1.1731 bolsters the bearish outlook.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-08-07techs6.gif
AUDUSD – The AUDUSD wave 4 correction that we wrote about yesterday has extended to the 50% of .7895-.7680 at .7787.Price must remain below .7840 in order to keep the bearish structure intact but the 61.8% at .7812 should provide formidable resistance.The upside looks limited at this point and price should come under .7680 in a 5th wave decline before a larger upward correction takes place.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-08-07techs7.gif
NZDUSD – Kiwi has also corrected recent weakness from .6720 in a 4th wave.The 50% of .7036-.6720 at .6877 has held as resistance so far but the 61.8% at .6914 may be in play as the pair still looks bid.Still, the next move of consequence should be below .6720 in a 5th wave decline.The bearish structure remains intact as long as price remains below .6970.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-08-07techs8.gif
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-08-07techs9.gif
EURUSD – Ultimately, we look for the decline that began at 1.3262 to test at least 1.2757.This is where the decline from 1.3262 would equal the 1.3370-1.2865 decline.The major long term supporting trendline intersects with the 1.2700 figure at the end of March.Near term, the rally from 1.3072 to 1.3143 is likely a small degree 4th wave that should roll over from below 1.3143, bringing price under 1.3072 in the next day.The short term bearish target is the 161.8% extension of 1.3262-1.3142 / 1.3215 at 1.3022.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-07-07techs2.gif
USDJPY – Given the fact that daily RSI has turned up from below 30 and that daily CCI is turning up from below -100, we are looking for the USDJPY to challenge at least the 38.2% of 121.66-115.15 at 117.63.This Fibonacci level coincides with former congestion.This short term bullish scenario is best served with short term support holding at 116.20.A rally to 117.63 / 118.00 (117.98 is where the rally from 116.20 would equal the 115.15-116.91 rally) would possibly complete a 4th wave correction and give way to another bout of weakness to below 115.15.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-07-07techs3.gif
GBPUSD – A small degree wave 4 likely ended at 1.9361 last night.1.9361 is the 38.2% of 1.9655-1.9183 and the correction from 1.9183 is in 3 waves with waves A and C of that correction roughly equal (1.9183-1.9307 = 124 pips : 1.9229-1.9361 = 132 pips).Price should come under 1.9183 with 1.9361 resistance remaining intact.A break below 1.9183 may test the 61.8% of 1.8515-1.9915 at 1.9055.However, a decline below 1.9183 satisfies minimum expectations for the 5th wave.Since GBPUSD is in a wave 5 (compared to EURUSD in a wave 3), expect a correction back to 1.9360’sh once a wave low is established.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-07-07techs4.gif
USDCHF – Little is changed regarding the USDCHF.We still favor the bottoming scenario with risk at 1.2109.The next move of consequence should be in a wave C rally (inverse of EURUSD) to above 1.2575.A push through Friday’s high at 1.2264 bolsters the bullish scenario.Daily CCI has increased from below -100, which signals a reversal (higher).
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-06-07techs5.gif
USDCAD – The long term bearish bias remains intact.The decline off of the top of the 2 year channel combined with the outside monthly reversal favor the downside.Ultimately the decline from 1.1879 should come under 1.0927 to complete a 5th wave.The rally from 1.1564 has retraced 78.6% of the 1.1879-1.1564 decline in a 2nd wave.The next few weeks should see price come under 1.1564 and possibly even 1.1250-1.1326 – which marks the 138.2% to 161.8% extensions of 1.1879-1.1564 / 1.1761.1.1880 is critical resistance.A push above, while not expected, targets the 1.2000 figure.Coming under yesterday’s low at 1.1731 bolsters the bearish outlook.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-07-07techs6.gif
AUDUSD – The AUDUSD wave 4 correction that we wrote about yesterday has extended to the 50% of .7895-.7680 at .7787.Price must remain below .7840 in order to keep the bearish structure intact but the 61.8% at .7812 should provide formidable resistance.The upside looks limited at this point and price should come under .7680 in a 5th wave decline before a larger upward correction takes place.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-07-07techs7.gif
NZDUSD – Kiwi has also corrected recent weakness from .6720 in a 4th wave.The 38.2% of .7036-.6720 at .6841 has held as resistance and the rally from .6720 is in 3 waves.The pair should roll over from near current price and come under .6720 in a 5th wave decline.If resistance at .6861 fails, then this wave 4 may extend to the 50% at .6878.
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EURUSD – Ultimately, we look for the decline that began at 1.3262 to test at least 1.2757.This is where the decline from 1.3262 would equal the 1.3370-1.2865 decline.The major long term supporting trendline intersects with the 1.2700 figure at the end of March.Near term, a small degree 5th wave should unfold from close to current levels and take price under 1.3072.The 161.8% extension of 1.3262-1.3142 / 1.3215 at 1.3022 is our short term measured objective.1.3142 needs to hold as resistance in order to keep the most bearish structure intact.
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USDJPY – The USDJPY is nearing important resistance from the 2/27 low at 117.49.The pair should turn down before or at this level.Resistance at 117.49 is reinforced by the 61.8% of 118.88-115.15 at 117.44.A small degree 5th wave should come under 115.15, possibly testing the 12/5/2006 low at 114.42.A larger upward correction likely follows after a new low is made below 115.15.
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GBPUSD – Cable also appears ready to turn lower in a 5th wave that will come under 1.9183.Resistance is strong at the current juncture from previous congestion.A break below 1.9183 targets potential trendline support drawn off of the June 2006 and October 2006 lows near 1.9080.The 200 day SMA reinforces support at 1.9040.The immediate bearish outlook is best served with 1.9326 resistance remaining intact.A larger correction (upward) should follow once the 5th wave low is established below 1.9183 (again..focus on 1.9040/80).
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USDCHF – Little is changed regarding the USDCHF.We still favor the bottoming scenario with risk at yesterday’s low of 1.2109.The next move of consequence should be in a wave C rally (inverse of EURUSD) to above 1.2575.A push through Friday’s high at 1.2264 bolsters the bullish scenario.Daily CCI has increased from below -100, which signals a reversal (higher).
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USDCAD – The long term bearish bias remains intact.The decline off of the top of the 2 year channel combined with the outside monthly reversal favor the downside.Ultimately the decline from 1.1879 should come under 1.0927 to complete a 5th wave.The rally from 1.1564 has retraced 78.6% of the 1.1879-1.1564 decline in a 2nd wave.The next few weeks should see price come under 1.1564 and possibly even 1.1250-1.1326 – which marks the 138.2% to 161.8% extensions of 1.1879-1.1564 / 1.1761.1.1880 is critical resistance.A push above, while not expected, targets the 1.2000 figure
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AUDUSD – The AUDUSD is rolling over from its wave 4 correction ahead of the 38.2% of .7895-.7679 at .7761.Price should come under .7680 in a 5th wave.A break below .7680 targets the 61.8% of .7413-.7982 at .7631.The 200 day SMA at .7654 warrants watching as well.This morning’s high at .7759 is initial resistance but a push through there gives scope to the 61.8% of .7895-.7679 at .7813.
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NZDUSD – Kiwi is in the same position as the AUDUSD.That is, the rally from .6720 is a 4th wave correction that should give way to one more low to below .6720.The 38.2% of .5927-.7128 at .6670 is potential support on a break below .6720.The confluence of the 50% of .7035-.6720 / former congestion at .6877 is resistance.As is the theme here this morning, one more low in a small degree 5th wave likely gives way to a larger upward correction.
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EURUSD – The decline to start the week confirms our bearish bias.Ultimately, we look for the decline that began at 1.3262 to test at least 1.2757.This is where the decline from 1.3262 would equal the 1.3370-1.2865 decline.The 1.3370-1.2865 decline took 29 days and the 1.2865-1.3262 rally took 33 days.Given that the decline now underway is the third wave (either a C or a 3), look for this decline to accelerate and reach the cited target in faster than 30 days.The major long term supporting trendline intersects with the 1.2700 figure at the end of March.Near term support is at the 2/22 low at 1.3080 but look for a test of 1.3018, which is the 161.8% extension of 1.3262-1.3142 / 1.3096. http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/03/dailyfx_reports/techs/03-05-07techs2.gif
USDJPY – Price has broken below the confluence of the 200 day SMA, 61.8% of 114.42-122.21, and trendline drawn off of the May 2006 and December 2006 lows.We mentioned Friday that “a break of this support (daily close below) would indicate a major change in trend.” The USDJPY closed below the 200 day SMA on Friday but held above the trendline (on a closing basis).That trendline is at 1.1685 today and is now resistance.The next major support is the 12/5/2006 low at 114.44.
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GBPUSD – The decline below 1.9260 strongly suggests that a major top is in place at 1.9915.Ultimately, we look for the ending diagonal to be fully retraced, which means that price should test the lower 1.8000’s.Former support at 1.9260 is now resistance.Short term support is at the 61.8% of 1.8515-1.9919 at 1.9054 (200 day SMA is at 1.9036).
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USDCHF – Although the USDCHF spiked below the 61.8% of 1.1878-1.2575 at 1.2144 this morning, we still favor the bottoming scenario.The next move of consequence should be in a wave C rally (inverse of EURUSD) to above 1.2575.A push through Friday’s high at 1.2264 bolsters the bullish scenario.The low at 1.2109 should remain intact.
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USDCAD – The long term bearish bias remains intact.The decline off of the top of the 2 year channel combined with the outside monthly reversal favor the downside.Ultimately the decline from 1.1879 should come under 1.0927 to complete a 5th wave.The rally from 1.1564 has retraced 78.6% of the 1.1879-1.1564 decline in a 2nd wave.The next few weeks should see price come under 1.1564 and possibly even 1.1250-1.1326 – which marks the 138.2% to 161.8% extensions of 1.1879-1.1564 / 1.1761.1.1880 is critical resistance.A push above, while not expected, targets the 1.2000 figure
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AUDUSD – The decline below .7827 favors the bearish scenario and focus in now on the 1/31 low at 7698.A longer term bullish outcome is still possible if .7698 holds as support.If .7698 is broken, then look for a test of the 61.8% of .7413-.7983 at .7631.The 2/28 low at .7853 is resistance although price is unlikely to come close to this level in the near term.
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NZDUSD – Given the extent of weakness so far, it is possible that Kiwi is in the initial stages of a big C wave that will eventually break below .5927.The monthly chart below shows the wave count for this interpretation.The pair is currently testing support from the 11/1 high at .6757.Given this support and the possibility that the NZDUSD is nearing the end of a short term 3rd wave, don’t be surprised to see some consolidation in the next day or two..6970 is critical resistance with .6850 as interim resistance.
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EURUSD – It remains our contention that price has already topped at 1.3262.The decline below 1.3182 supports a bearish structure – at least in the short term.Ultimately, we look for the decline that began at 1.3262 to test at least 1.2757.This is where the decline from 1.3262 would equal the 1.3370-1.2865 decline.The 1.3370-1.2865 decline took 29 days and the 1.2865-1.3262 rally took 33 days.Given that the decline now underway is the third wave (either a C or a 3), look for this decline to accelerate and reach the cited target in faster than 30 days.The major long term supporting trendline intersects with the 1.2700 figure at the end of March.
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USDJPY – Price continues to brush up against the confluence of the 200 day SMA, 61.8% of 114.42-122.21, and trendline drawn off of the May 2006 and December 2006 lows.A break of this support (daily close below) would indicate a major change in trend.Near term, 117.85 is resistance with a break above exposing 118.89.Support below the aforementioned trendline is at the 78.6% fibo of 114.42-122.21 at 116.10.
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GBPUSD – The longer term wave structure suggests that a major top is in place at 1.9915.In fact, the rally from 1.8090 traced out an ending diagonal.Ending diagonals are often fully retraced.A decline below 1.9260 strongly suggests that a top is in place at 1.9915.Near term price action is confirming our bearish bias.Price is currently testing support at a line drawn off of the 1/8 and 3/31 lows.A daily close below this line may provide the impetus needed for a breakout to the downside.Short term support is at 1.9402 with a break there shifting focus to the 1/8 low at 1.9260.
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USDCHF – The USDCHF is little changed.The 61.8% of 1.1878-1.2575 at 1.2144 may have marked the low but price needs to rally above the 2/20 low at 1.2312 to more confidently say that at least a near term low is in place.Still, downside risk is limited.Daily oscillators are slowly turning higher as well.Daily CCI is below -100 and an increase in the oscillator to above -100 signals a reversal.
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USDCAD – The long term bearish bias remains intact.The decline off of the top of the 2 year channel combined with the outside monthly reversal favor the downside.Ultimately the decline from 1.1879 should come under 1.0927 to complete a 5th wave.The rally from 1.1564 has retraced 61.8% of the 1.1879-1.1564 decline in a 2nd wave.The next few weeks should see price come under 1.1564 and possibly even 1.1250-1.1326 – which marks the 138.2% to 161.8% extensions of 1.1879-1.1564 / 1.1761.1.1761 is resistance.A push above, while not expected, targets the 78.6% at 1.1812.
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AUDUSD – The AUDUSD has tested the .7827 level that we have focused on in recent days and bounced.This is the ‘make or break’ level as far as we are concerned.A break below gives scope to a more pronounced decline (test of .7698).Since the decline from the top (.7950) is in just 3 waves, this could simply be a correction which gives way to a 5th wave to above .7950 (see chart below).
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NZDUSD – Analysis is unchanged from yesterday – “Given the long term head and shoulders pattern along with the 78.6% fibo of .7470-.5927 at .7138, it is possible that Kiwi is near a major top.The best interpretation on the daily accounts for an extended wave 1 from .5927.As mentioned with the USDJPY, a correction following a 5 wave sequence where the 1st wave is extended tends to bottom near the bottom of the 2nd wave.Thus, expectations are for a decline to .6528 from near current price.The 78.6% fibo at .7138 is risk.The pair looks entrenched in a 3rd wave in the short term that should carry to at least .6878.”Kiwi is currently at .6870 so focus has shifted to the 161.8% extension of .7128-.6970 / .7036 at .6783.
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EURUSD – It remains our contention that price is in the process of topping or has already topped at 1.3262.The range has tightened the last two days, which increases the odds of a break.The breakdown point is 1.3182.We are treating the rally from 1.3182 as a small degree 2nd wave within a larger 5 wave decline.The decline from 1.3262 to 1.3182 is in 5 waves which improves the odds that a top is in place at 1.3262.Look for a test of the 1.3100 figure (1.618 extension of 1.3262-1.3182 / 1.3244 is at 1.3114) relatively quickly IF price breaks below 1.3182.1.3162 must hold in order to keep the bearish structure intact.The chart today shows price action since the December high at 1.3370.Price has stalled right at the 78.6% fibo of the 1.3370-1.2865 decline and the rally is in 3 waves (with the C wave unfolding in 5 itself).
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USDJPY – The vicious decline from 121.66 looks like a C wave that completed the correction of strength from 122.21.Price has held near the previous 4th wave low at 117.98 (dipping below to 117.49 intraday yesterday).Additional support is at the 200 day SMA (117.36), the 61.8% of 114.42-122.21 at 117.41, and a potential trendline drawn off of the May 2006 and December 2006 lows.That line is at 116.69 today and increases about 2 pips per day.With the shelf of support just below current price, risk is now to the upside.A break above 119.00 warrants a bullish bias.
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GBPUSD – The longer term wave structure suggests that a major top is in place at 1.9915.In fact, the rally from 1.8090 traced out an ending diagonal.Ending diagonals are often fully retraced.A decline below 1.9260 strongly suggests that a top is in place at 1.9915.However, near term, price seems poised to test at least the 61.8% of 1.9918-1.9402 at 1.9720 as the 1.9519-1.9655 rally was retraced in 3 waves to its own 61.8% retracement at 1.9569.
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USDCHF – The USDCHF has not budged since yesterday - “the pair is currently in the C wave position of the A-B-C correction.Although the pair has bounced this morning at the 50% fibo of 1.1878-1.2575 at 1.2227, the intraday charts suggest that the decline has more to go.Watch the 61.8% fibo of 1.1878-1.2575 at 1.2145 for a bottom.”Price has rallied over 60 pips off of the low at 1.2144 but price needs to rally above the 2/20 low at 1.2312 to more confidently say that at least a near term low is in place.Still, downside risk is limited.
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USDCAD – The push above 1.1713 negates the short term bearish structure so focus has shifted to the 61.8% of 1.1879-1.1564 at 1.1758.This level is also previous congestion, which increases the likelihood of selling interest.Remember that the longer term wave structure is bearish as price is has turned down in the “5th of the 5th” wave that should bring prices below 1.0927 in order to complete the long term downtrend.As such, recent strength should be viewed as a wave 2 that is retracing the initial wave 1 decline from 1.1879 to 1.1564.The monthly chart sports an outside reversal as well.
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AUDUSD – As long as price remains above .7827, the potential exists for a wave 5 rally to above .7950 before a larger pullback.On the other hand, .7827 is the bearish pivot.Daily CCI has rolled over from above 100, which is often a reliable turn signal.In the very short term, there are 5 waves down from .7950 to .7840, so a bounce to fibo support at the 50% / 61.8% at .7895-.7907 would be considered a correction.
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NZDUSD – Analysis is unchanged from yesterday – “Given the long term head and shoulders pattern along with the 78.6% fibo of .7470-.5927 at .7138, it is possible that Kiwi is near a major top.The best interpretation on the daily accounts for an extended wave 1 from .5927.As mentioned with the USDJPY, a correction following a 5 wave sequence where the 1st wave is extended tends to bottom near the bottom of the 2nd wave.Thus, expectations are for a decline to .6528 from near current price.The 78.6% fibo at .7138 is risk.”The pair looks entrenched in a 3rd wave in the short term that should carry to at least .6878.The high today at .7036 is resistance.
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EURUSD – Our analysis from yesterday that “a likely level for a reversal is 1.3257/64.1.3257 is the 78.6% fibo of 1.3364-1.2865 and 1.3264 is the monthly R1 pivot.Additionally, the 61.8% extension of waves 1 through 3 is at 1.3253 (1.3081 + (.618 x (1.3190 – 1.2911))” has proved correct so far.A break below yesterday’s low at 1.3160 would bolster the bearish case.Near term resistance is at former intraday support of 1.3211.Yesterday’s high at 1.3262 needs to hold in order for the bearish structure to remain intact.Short term bearish support on a break below 1.3160 is at 1.3080.Also keep in mind that this decline is expected to take prices below 1.2865 (eventually and barring a break above 1.3262).
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USDJPY – The vicious decline from 121.66 looks like a C wave that completed the correction of strength from 122.21.Price has held near the previous 4th wave low at 117.98 (dipping below to 117.49 intraday yesterday).Additional support is at the 200 day SMA (117.36), the 61.8% of 114.42-122.21 at 117.41, and a potential trendline drawn off of the May 2006 and December 2006 lows.That line is at 116.69 today and increases about 2 pips per day.With the shelf of support just below current price, risk is now to the upside.A break above 119.00 warrants a bullish bias.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/02/dailyfx_reports/dailytechs/22807techs_3.gif
GBPUSD – The longer term wave structure suggests that a major top is in place at 1.9915.In fact, the rally from 1.8090 traced out an ending diagonal.Ending diagonals are often fully retraced.A decline below 1.9260 strongly suggests that a top is in place at 1.9915.The rally to 1.9675 may have completed a correction of the 1.9915-1.9401 decline.Only a decline below 1.9401 gives scope to more additional potential.
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USDCHF – From yesterday “the pair is currently in the C wave position of the A-B-C correction.Although the pair has bounced this morning at the 50% fibo of 1.1878-1.2575 at 1.2227, the intraday charts suggest that the decline has more to go.Watch the 61.8% fibo of 1.1878-1.2575 at 1.2145 for a bottom.”Price has rallied over 60 pips off of yesterday’s low at 1.2144 but price needs to rally above the 2/20 low at 1.2312 to more confidently say that at least a near term low is in place.Still, downside risk is limited.
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USDCAD – The USDCAD is most likely in a wave 3 that has the potential to reach the 161.8% extension of wave 1 at 1.1297 in the next few weeks (1.1719 – (1.618 x (1.1879 – 1.1620)).1.1719 needs to hold in order for the near term bearish outlook to remain intact.Potential support prior to 1.1297 is the point where the decline from 1.1719 would equal the 1.1879-1.1620 decline.This is at 1.1458, which intersects with both the 50% of 1.1028-1.1879 at 1.1455 and the 7/24/2006 high at 1.1461.Resistance shifts to the 61.8% of 1.1879-1.1564 at 1.1758 on a rally above 1.1719.
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AUDUSD – As long as price remains above .7827, the potential exists for a wave 5 rally to above .7950 before a larger pullback.On the other hand, .7827 is the bearish pivot.Daily CCI has rolled over from above 100, which is often a reliable turn signal.In the very short term, it looks like a 5th wave down from .7887 will take price below .7853.
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NZDUSD – Analysis is unchanged from yesterday – “Given the long term head and shoulders pattern along with the 78.6% fibo of .7470-.5927 at .7138, it is possible that Kiwi is near a major top.The best interpretation on the daily accounts for an extended wave 1 from .5927.As mentioned with the USDJPY, a correction following a 5 wave sequence where the 1st wave is extended tends to bottom near the bottom of the 2nd wave.Thus, expectations are for a decline to .6528 from near current price.The 78.6% fibo at .7138 is risk.”Similar to the AUDUSD, it looks like a small 5th wave is working down (from .7028).
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EURUSD – The EURUSD is nearing the end of the rally from 1.2865.A likely level for a reversal is 1.3257/64.1.3257 is the 78.6% fibo of 1.3364-1.2865 and 1.3264 is the monthly R1 pivot.Additionally, the 61.8% extension of waves 1 through 3 is at 1.3253 (1.3081 + (.618 x (1.3190 – 1.2911)).Daily CCI is above 100 and daily RSI is inching closer to 70 (currently at 65).While the 1.3250/60 level is attractive, the pair could reverse sooner.Since there are 5 waves up from 1.2911, we are looking for at least a correction of that rally.However, it is our contention that the pair could turn down in a more violent fashion and eventually take out 1.2865.
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USDJPY – The impulsive decline in the USDJPY is likely a C wave that will complete the correction of the 114.42 to 122.21 rally.A potential terminus for wave C is 118.30/43.118.43 is where the C wave (beginning at 121.63) would equal the A wave (122.21-118.97).118.30 is the 50% fibo of 114.42-122.21.This level is close to the bottom of wave 2 (in the rally from 114.42-122.21) at 117.98.One characteristic of Elliott waves is that a correction following a 5 wave sequence where the 1st wave is extended tends to bottom near the bottom of the 2nd wave.Yesterday’s low at 120.35 is resistance.
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GBPUSD – The longer term wave structure suggests that a major top is in place at 1.9915.In fact, the rally from 1.8090 traced out an ending diagonal.Ending diagonals are often fully retraced.A decline below 1.9260 strongly suggests that a top is in place at 1.9915.In the near term, a rally above 1.9680 is likely in order to complete an A-B-C correction of the decline from 1.9915 to 1.9401.The 61.8% fibo of the decline is at 1.9718 and the point where C would equal A is at 1.9709.In summary, a rally to 1.9709/18 is expected prior to a reversal.
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USDCHF – The USDCHF is also nearing the end of its 3 wave correction.The pair is currently in the C wave position of the A-B-C correction.Although the pair has bounced this morning at the 50% fibo of 1.1878-1.2575 at 1.2227, the intraday charts suggest that the decline has more to go.Weakness from 1.2555 should unfold in 5 waves (the C wave).Currently, there are only 3 waves down from 1.2555.Watch the 61.8% fibo of 1.1878-1.2575 at 1.2145 for a bottom.A rally above 1.2438 would strongly suggest that a bottom is already in place.
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USDCAD – The USDCAD is most likely in a wave 3 that has the potential to reach the 161.8% extension of wave 1 at 1.1297 in the next few weeks (1.1719 – (1.618 x (1.1879 – 1.1620)).1.1719 needs to hold in order for the near term bearish outlook to remain intact.Potential support prior to 1.1297 is the point where the decline from 1.1719 would equal the 1.1879-1.1620 decline.This is at 1.1458, which intersects with both the 50% of 1.1028-1.1879 at 1.1455 and the 7/24/2006 high at 1.1461.
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AUDUSD – The Aussie is due for at least a correction.Divergence with oscillators on the 240 minute chart favor the corrective outlook as does stalling at the previous top of .7940.A break of the short term trendline (bold) gives scope to a test of the 38.2% of .7706-.7950 at .7857.Price above this line indicates that there is potential for one more high.It takes a decline below .7827 to suggest additional bearish potential.
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NZDUSD – There are 5 waves up from .6769 so at least a corrective decline is expected.However, given the long term head and shoulders pattern along with the 78.6% fibo of .7470-.5927 at .7138, it is possible that Kiwi is near a major top.The best interpretation on the daily accounts for an extended wave 1 from .5927.As mentioned with the USDJPY, a correction following a 5 wave sequence where the 1st wave is extended tends to bottom near the bottom of the 2nd wave.Thus, expectations are for a decline to .6528 from near current price.The 78.6% fibo at .7138 is risk.Comingunder .6989 bolsters the bearish case.
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EURUSD – While one more high above 1.3174 is possible, we maintain that this could be a MAJOR top (the end of an A-B-C correction from 1.2865).Only a break below 1.2865 confirms that wave 3 down is underway.A break of 1.2865 would shift focus to 1.2667, which is where the 1.3370-1.2865 decline would equal the decline from 1.3174.Again, one more high in the 5th of the C wave is possible but don’t expect a rally to push much beyond 1.3174. http://www.dailyfx.com/export/sites/dailyfx/story-images/2007/02/dailyfx_reports/dailytechs/02-19-07techs2.gif
USDJPY – We said Friday that“One more low is likely given the RSI extreme in place (240 minute) at 119.17.Rarely does a market turn up (or down for that matter) following a momentum extreme.One more low would create bullish divergence with oscillators and free up the USDJPY for a rally.Still, this pair is nearing at least an interim bottom if not a major one.The 78.6% of 117.97-122.21 at 118.89 may be the level at which the USDJPY ultimately turns higher.”The USDJPY has turned from 118.99 in what could be a resumption of the longer term uptrend.For more on the USDJPY, see http://www.dailyfx.com/story/special_report/special_reports/A_Dip_in_a_Long_1171644703102.html
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GBPUSD – The longer term wave structure suggests that a major top is in place at 1.9915.In fact, the rally from 1.8090 traced out an ending diagonal.Ending diagonals are often fully retraced.A decline below 1.9260 strongly suggests that a top is in place at 1.9915.A weekly close below the short term trendline last week bolsters the shorter term bearish case.In the very short term, Cable may be in a 3rd wave.If this is the case, then measured support doesn’t begin until 1.9351 – which is where the decline from 1.9568 would equal the decline from 1.9680 to 1.9464.
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USDCHF – Little has changed regarding the USDCHF.An A-B-C correction from 1.2575 may have ended at 1.2316.Additional support is at the 38.2% of 1.1878-1.2575 at 1.2310.The analysis is the same as the EURUSD (but in the inverse).That is, we are looking for a bottom.The pair has slipped below the 200 day SMA but only by the barest of margins.Very short term resistance is at the former support shelf of 1.2376.A break above there exposes the high from 2/15 at 1.2412.
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USDCAD – Friday’s turn lower likely marks the resumption of the long term downtrend.Long term focus is to below 1.0927.There are (or nearly are) 5 waves down from 1.1879 so now is not the time to get short term bearish.A bounce to Fibonacci support could see the 38.2% at 1.1718 or the 50% at 1.1749 (which is also the 4th wave of one lesser degree).The USDCAD may make one more low prior to a rally as small ending diagonal may be forming from 1.1692.Support is former resistance at the 2/15/2006 high at 1.1591.
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AUDUSD – We said Friday that“A level to watch is the confluence of the 78.6% of .7941-.7697 / trendline drawn off of the 1/3 and 1/23 highs at .7888.”The AUDUSD reversed at .7889 this morning.This may be the beginning of a longer term downtrend to below .7698.Short term support is at the 2/16 low at .7829..7889 is critical resistance.
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NZDUSD – Kiwi has broken through its resisting trendline today and made a run on the 1/25 high at .7037.Given the proximity of resistance at .7037, upside risk is well defined.Today’s spike low at .6934 is support but a decline below would suggest additional bearish potential.
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