Euro Bounces From Fibo Support
Japanese Yen Garners Little Interest
British Pound Bounces From Fibo Support
Swiss Franc May Also Complete 5th Wave
Canadian Dollar Weakens Above 1.1500
Australian Dollar Looking Offered
New Zealand Dollar Topping?
EURUSD EURUSD bids were triggered just below the 38.2% fibo of 1.2761-1.3367 at 1.3136 and the decline from 1.3367 is in 3 waves and thus corrective in nature. We focused last week on the possibility of a corrective decline that would be followed by one more rally (to above 1.3367) to complete the 5 wave bullish sequence from 1.2483. Still, downside risk outweighs upside risk at this point. Daily oscillators favor a deeper decline with RSI crossing below 70 and CCI crossing below 100.
USDJPY The USDJPY has rallied to the 50% of 119.87-114.42 at 117.14, just below a resisting trendline drawn off of the 10/24 and 11/17 highs. The pattern since the 12/5/2005 high at 121.38 has taken on the form of an inverse head and shoulders pattern. However, a rally through the neckline is required to complete the pattern. The neckline is drawn off of the 12/5/2005 and 10/13/2005 highs and is near 119.60 today (decreases about 2 pips per day). Resistance prior to the neckline is at the 78.6% of 119.87-114.42 at 117.78. Support stems from the 11/30 high at 116.54.
GBPUSD Cable is in the same position as the EURUSD. That is, the decline from 1.9846 to 1.9464 (the 38.2% of 1.8834-1.9846 is at 1.9460) is likely the 4th wave of the larger 5th wave. What follows then is the 5th of the 5th, which likely exceeds 1.9846 before a much more pronounced decline takes place. Fridays high at 1.9726 is initial resistance. A drop below 1.9464 suggests a larger correction is in the works and focus would then shift to the 50% of 1.8834-1.9846 at 1.9339.
USDCHF The USDCHF has worked higher but failed prior to the 11/29 high at 1.2116 yesterday. Wave structure is the same as that of the EURUSD and GBPUSD, albeit in the opposite direction. 1.2116 remains resistance and a 5th wave decline would challenge the 12/5 low at 1.1878 and expose the 4/21/2005 low at 1.1739.
USDCAD The USDCAD is currently testing resistance from the 4/13 high at 1.1533. Price above the support line drawn off of the 9/1 and 10/30 highs keeps the bias a bullish one. A line parallel to the support line and extended from the 8/18 high at 1.1271 places trendline resistance just above current price. However, daily oscillators are increasing and not yet overbought suggesting that strength could very well persist. Significant resistance is not until the 4/3 high at 1.1771.
AUDUSD After taking out the 12/1 high at .7921 on Friday, the AUDUSD declined to near the .7800 figure yesterday. The short term double top at .7921/29 along with bearish divergence (daily oscillators) and daily oscillators declining from overbought levels all give scope to further weakness in the Aussie. A decline below .7811 shifts focus to the 11/1 high at .7766.
NZDUSD The Kiwi has clustered near the 61.8% of .7463-.5927 between .6814 and .6939. While RSI has declined from above 70 on the daily, the uptrend remains in place above the trendline drawn off of the 6/28 and 11/15 lows. That line is at .6694 today and increases about 4 pips per day.
