-GBPCHF approaches resistance
-GBPCAD prepares to break higher
-GBPAUD and GBPNZD should see rebounds
British Pound / Swiss Franc
The rally from the December low reached 1.75 and the advance is in 3 waves and fits as wave 4 within the 5 wave decline from the 2007 high. A drop below 1.5113 (December low) could occur in order to complete 5 waves down. It is also possible that the GBPCHF has entered into a longer term range in what ends up as a triangle or flat. There are too many possibilities right now to have confidence in direction. A possible scenario though that fits with the structure of the decline from 1.75 is that an ending diagonal is underway as wave 5. Diagonals consist of overlapping 3 wave movements. Staying below 1.7496 keeps this count on track.
British Pound / Canadian Dollar
The GBPCAD is preparing for an upside break through 1.84. The 1.6711-1.8418 advance is an impulse (5 waves), which is either wave A or 1 of an A-B-C advance or larger impulse (5 waves). Price has held the 50% of the rally from 1.6711. A drop below there would expose the 61.8% at 1.7344.
British Pound / Australian Dollar
The drop below the 200 day SMA and the 55 day SMA favors the downside. A resumption of the long term bear trend that began in 2001 is possible. Resistance is at 2.1187.
British Pound / New Zealand Dollar
A multi-year triangle has been underway in the GBPNZD and recent weakness brings forth the possibility that the triangle is complete at 2.8968. Bolstering this longer term bearish outlook is the 5 wave drop from 2.8968. Near term studies are quite oversold which supports a small wave 2 rally; resistance is at 2.6362. The 200 day SMA (not shown) is at 2.68.
Jamie Saettele publishes Daily Technicals every weekday morning (930 am EST), COT analysis (published Monday mornings), technical analysis of currency crosses throughout the week (EUR on Tuesday, JPY on Wednesday, GBP on Thursday, AUD on Friday), and the DFX Trend Index every day after the NY close. He is also the author of Sentiment in the Forex Market.
Please send comments about this report to jsaettele@dailyfx.com
