Euro Finds Bids
Japanese Yen Tests 119
British Pound Forms Base
Swiss Franc Tests Resistance
Canadian Dollar Range Bound
Australian Dollar Topping
New Zealand Dollar Probes Trendline
EURUSD The EURUSD has rallied from yesterdays low at 1.2524 to test the 38.2% fibo of 1.2642-1.2524 at 1.2569. Our focus remains on the short term downward sloping trendline drawn through 1.2827, 1.2765, and 1.2642 just above the 1.2600 figure. Trendline resistance is reinforced by the 20 day SMA at 1.2603. Strength through the trendline shifts focus to the 10/19 high at 1.2642. A break below the shelf of support at that extends to 1.2456 would place bears in firm control.
USDJPY Yesterdays doji candle on the daily and the failure of the pair to reach 119.87 gives scope to a near term decline. Yesterdays high at 119.65 is now resistance. Price does remain above the 5 month supporting trendline. That line is at 117.80 today and increases about 9 pips per day. It would take a definitive break of that line (2 day close) in order to suggest that the larger trend has turned lower.
GBPUSD Cable is working higher from yesterdays low at 1.8672. Price above 1.8672 keeps the near term picture bullish with focus on the 10/20 high at 1.8859. Weakness below 1.8672 could slip to potential trendline support drawn through 1.8090, and 1.8515 near 1.8575. A short term (roughly month long) inverse head and shoulders pattern is evident. A break above 1.8859 would complete the pattern and instill confidence in a more bullish outlook.
USDCHF The rejection of strength at the 1.2700 figure has resulted in a short term sequence of lower highs (see chart below). As such, weakness is favored as long as 1.2703 holds as resistance. The 10/19 low at 1.2546 is support. If breached, then focus shifts to the 61.8% of 1.2288-1.2769 at 1.2472. A decline near there would complete a 3 wave correction of dollar strength and possibly give way to the next leg up for the dollar.
USDCAD The USDCAD remains stuck in the 1.1200-1.1320 range. The impulsive look of the 1.1413-1.1202 decline keeps short term wave structure bearish as long as 1.1413 holds. Initial resistance yesterdays high at 1.1322. Price also remains below the 200 day SMA, which is at 1.1301 (USDCAD had broken above the SMA on 10/10 and broke back below on 10/19).
AUDUSD The AUDUSD appears to be topping out. A clear 5 wave rally has taken place from .7413 thus probability favors a move lower in the near term. Initial support is at yesterdays low at .7559. Bearish divergence with hourly oscillators at todays high and hourly RSI declining from above 70 favors the topping scenario. A push above .7618 negates the immediate bearish stance and shofts focus to the 78.6% of .7721-.7413 at .7655.
NZDUSD Daily CCI has declined from above 100 and alerted us to a reversal opportunity. Our focus remains on the 4 month supporting trendline at todays low (.6588). A daily close below opens up the door for additional losses. Using a right strength of 2, we can place a swing high at .6692 (10/19 high). This is a lower swing high than the 9/26 high at .6721. By definition, lower swings highs constitute a downtrend. Of course, a break below the aforementioned trendline is required in order to instill confidence in a bearish scenario.
