Euro Offers at 1.3200
Japanese Yen Weak Across the Board
British Pound Highest Since 1992
Swiss Franc In Tight Range
Canadian Dollar Rejects 1.1400
Australian Dollar Due For a Correction
New Zealand Dollar Stalling at Prior High
EURUSD The EURUSD has rallied to the 1.3200 figure again this morning. The pair has held below the 11/29 high at 1.3216 so far, giving scope to a short term lower swing high. A drop below 1.3130 would confirm the lower swing high and give scope to additional weakness. Price has come back to close below the upper Bollinger band (2 standard deviations) on the daily after spending 5 days outside the upper band. This could indicate that the move immediate move higher has exhausted itself and that a corrective move lower is due. The next measured objective for bulls would be the level where larger wave 5 (daily chart) would equal 61.8% of waves 1 through 3 at 1.3280.
USDJPY The USDJPY continues to range with the 38.2% fibo of 118.46-115.37 at 116.54 capping gains this morning. Since the 11/27 low at 115.37, the USDJPY has traced out a small flag (chart below), which gives scope to a continuation of weakness below 115.37. A break below 115.37 would shift focus to the 8/10 low at 114.65. However, a sustained break above 116.54 would negate the flag formation and suggest a deeper upward correction towards the 50% fibo at 116.91.
GBPUSD The Pound remains strong across the board. So strong in fact, that Cable reached prices this morning that havent been seen since Great Britain was part of the European Monetary Union. Oscillators on every time frame remain overbought and the short term time frames (hourly and 240 minute) show bearish divergence with oscillators. However, there is little confidence in a sustained move lower until price falls below 1.9433. The next upside target remains the point where wave 5 equals 61.8% of waves 1 through 3 at 1.9732.
USDCHF The USDCHF made an attempt on former short term resistance at 1.2116 this morning but bulls were rejected and the USDCHF has slipped to 1.2050. Price remains in the middle of the tight 1.2011-1.2116 range. Selling pressure remains strong and a drop below 1.2011 exposes the 5/15 low at 1.1919. Still, a rally through 1.2116 would suggest that an interim low is in place at 1.2011. Focus would then shift to the 11/23 low at 1.2203.
USDCAD The larger uptrend remains in place above the support line drawn off of the 9/1, 9/28 and 10/30 lows. However, this mornings rally was rejected at the 1.1400 figure. Still, the rally from 1.1285 is in 5 waves, which favors a corrective move lower from near current levels to fibo support from 1.1362 (38.2% of 1.1285-1.1409) to 1.1333 (61.8%) before a more impressive rally takes place. A dip below 1.1285 would negate the bullish stance.
AUDUSD The Aussie is strong as the currency continues its assault on the US Dollar. The AUDUSD is at its highest since March of 2005. The large triangle on the daily chart places triangle resistance near .7970, just below the 3/8/2005 high at .7988. Bulls seem intent on testing the top of this triangle but risk of a temporary setback is high as short term oscillators exhibit bearish divergence at overbought levels. Initial support in the event of a setback is at the 11/29 low at .7818.
NZDUSD After correcting lower from the high yesterday at .6823, the Kiwi dollar has unconvincingly rallied but failed to overtake .6823. A decline from before .6823 to below .6774 would confirm a short term double top (with a slightly lower swing high) and give scope to weakness towards the 11/24 high at .6738. Of course, the bullish break of the recent range (discussed yesterday) presents upside risk with the next bullish target at the 61.8% of .7461-.5927 at .6875.
