· Euro Slowly Gains<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
· Japanese Yen Still Firm
· British Pound Rally Lacks Conviction
· Swiss Franc Also Corrective
· Canadian Dollar Shows Resilience
· Australian Dollar Little Changed
· <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />New Zealand Dollar Weakens Slightly
EUR/USD EUR/USD has rallied but failed (at least temporarily) at the 61.8% fibo of 1.2670-1.2551 at 1.2624. The move up is corrective in nature as well. The structure is 3 waves up from 1.2540 and oscillators on the hourly are beginning to turn over and head back down. As such, prices appear headed towards todays low at 1.2577 with a break lower targeting yesterdays low at 1.2540. Any strength must contend first with the 78.6% fibo of 12670-1.2540 at 1.2642.
USD/JPY The choppy decline to back below the 115.00 handle has resulted in positive divergence with oscillators at todays 114.50 low giving scope to another test of the 115.00 handle if the support from the 6/16 low / todays low at 114.38/55 holds. A break lower probes a tentative trendline at around 114.00. The bearish argument strengthens significantly on a break below the trendline and the next target would then be the 61.8% fibo of 108.96-115.75 at 111.56. Initial resistance is the 6/16 high at 115.18.
GBP/USD The cable rally from 1.8372 has been uninspiring and resistance at a downward sloping line from the 6/5 high at 1.8879 has held keeping intact the prospect of lower prices and a test of the 6/20 low at 1.8372. A break below there exposes the 6/13 low at 1.8315. Hourly oscillators are declining and favor a short term bearish view. The pair currently trades at support from the confluence of the 10 and 50 day SMAs at 1.8425/27.
USD/CAD USD/CAD rallies continue to fail at a ceiling of resistance near 1.1252 with the most recent attempt yesterday (high at 1.1252). The decline from 1.1252 picked up steam but has stalled at the 38.2% fibo of 1.0960-1.1248 at 1.1138. With a triple top at the 1.1250 area it appears that probability favors a return to the lower end of the range near the lows from 5/31 and 6/12 at 1.0927/60. Immediate resistance is at the series of daily highs near 1.1250 but a break above there could trigger a massive short covering rally towards the 50% fibo of 1.1771-1.0927 at 1.1348.
AUD/USD AUD/USD is very little changed from yesterday. RSI continues to drop from overbought levels on the hourly, which favors shorts in the near term. Support is at the 6/19 low of .7357 and the 6/14 low at .7344. A break below there exposes the 61.8% fibo of .7014-.7791 at .7313. The longer term the chart the more bearish the picture. Last week, the pair broke below the both the 20 and 40 week SMAs and the monthly chart shows a massive reverse hammer candle on last months candle along with a multi year head and shoulders reversal.
NZD/USD Kiwi is also very little changed. The pair does appear to be in an ending 5th wave down and the pair could go to the confluence of the 78.6% fibo of .5991-.6443 / 138.2% extension of .6428-.6229 at .6078/88. Still, the pair would have to contest with support at the 6/19 low / 61.8% fibo of .5991-.6443 at .6149/64. Any bounce from support would contend with todays high at .6206.
Glossary of Terms
CCI(20) 20 day Commodity Channel Index
> 0 bullish
0 > bearish
> 100 extremely bullish
-100 > - extremely bearish
RSI(14) 14 day Relative Strength Index
> 50 bullish
50 > bearish
> 70 overbought
30 > - oversold
MACD ? - MACD slope (MACD MACD[1])
> 0 bullish
0 > - bearish
Mom(8) 8 day Momentum (shorter-term direction)
> 0 bullish
0 > - bearish
ATR(14) 14 day <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />AverageTrueRange (volatility)
Medium 75th percentile* > ATR(14) > 25th percentile*
High - > 75th percentile*
Low 25th percentile* >
ADX(14) 14 day Average Directional Index (directional strength)
> 30 strong
30 > - weak
*measured against past 3 months
