Euro Breaks Below Triangle
Japanese Yen Terminal Pattern
British Pound Below Trendline
Swiss Franc Closes Above 200 day SMA
Canadian Dollar Back In Range
Australian Dollar At Resisting Trendline
New Zealand Dollar Head and Shoulders
EURUSD The EURUSD has broken out of a 5 month triangle pattern. Fridays low at 1.2570 is just above the 7/26 low at 1.2557. A break below there exposes the 7/19 low at 1.2456. Weekly RSI is below 50 for the first time since 3/24 (when EURUSD was at 1.2035). Fridays close below the lower Bollinger band (daily) following the historically tight bands favor a breakout to the downside. The 10 day SMA crosses below the 20 day on Friday as well. The 9/26 low at 1.2637 is initial resistance.
USDJPY The USDJPY broke through the 10/2 high at 118.39 and took off for 100 more pips. The pair remains below the 2/3 high at 119.38 but a push above there exposes the 12/5/2005 high at 121.38. The pattern since 7/19 has taken the form of an ending diagonal. This is a terminal pattern and usually ends in a thrust in the direction of the slope of the diagonal (in this case up). This may be what is happening now. Price often extends to a Fibonacci multiple of the widest point of the diagonal triangle. In this case, the 138.2% and 161.8% Fibonacci levels are potential ending points for this rally. The 138.2% of 117.88-113.95 happens to be 119.38 (2/3 high) and the 161.8% is at 120.30. A break back below 118.39 would suggest that the thrust higher is complete.
GBPUSD A head and shoulders continuation pattern has formed from the 9/11 low at 1.8602. The neckline is just below current price near 1.8640. A break below targets the 61.8% of 1.8090-1.9144 at 1.8494. The top of the left shoulder at 1.8897 is resistance (10/3 high). Like EURUSD, the 10 day SMA crosses below the 20 day SMA on Friday.
USDCHF The USDCHF closed above the upper Bollinger band (daily) and the 200 day SMA on Friday. It was the first close above the closely watched moving average since 4/14. More importantly, this may be the break of the 5 month ascending triangle. The pair did exceed the previous high (1.2622) but did not close above it. A close above Fridays high (1.2633) would bolster bullish prospects. 240 minute RSI is overbought so a corrective move lower is possible. Support comes in at the 38.2% fibo of 1.2288-1.2633 at 1.2502.
USDCAD The impulsive rally to the 1.1300 figure reinforces the bullish bias against 1.1028. The rally has stalled though and declining intraday oscillators leave open the possibility of a deeper retracement towards the 61.8% of 1.1085-1.1305 at 1.1169. A daily close above the 200 day SMA, currently at 1.1318, would reinforce the bullish bias against 1.1085. A possible 5 month head and shoulders continuation pattern clouds the picture. The neckline is at 1.1063. A takes a decline below there to in order to complete the pattern and suggest that prices are headed lower.
AUDUSD The Aussie has rallied off of Fridays low at .7413 following bullish divergence with oscillators on the 240 minute chart. Still, the break of the .7481 range low and the move below the 200 day SMA favors a longer term bearish bias. .7481 remains initial resistance but the former range high at .7573 must hold in order to keep the bearish bias intact. A trendline drawn through .7719 and .7554 is just above current price. Improving intraday oscillators favor a break of the line and a test of aforementioned resisance.
NZDUSD Little is changed regarding the Kiwi. A short term head and shoulders pattern is visible. Price must remain below .6721 to keep the bearish structure intact. A break below the 10/2 low at .6486 completes the h & s reversal pattern. Bears would then set sights on the 9/11 low at .6342.
