-EURGBP drops below support line
-EURCHF towards 1.49
-EURCAD drops below support line
-EURAUD and EURNZD may be bottoming
Euro / British Pound
I wrote last week that “the drop below.9078 (February high) and Elliott channel support suggests that a larger decline is underway. Price is also testing a line extended from the 2/10 and 2/24 lows. This unorthodox line is not expected to hold. With 5 waves complete at .9807, a large correction back to at least .8102 (beginning of 4th wave territory) is probably underway.” Price has broken below the support line as well as the 55 day SMA. The next support is the 200 day SMA at .8523. Selling rallies is the best strategy here. Initial resistance is .9093.
Euro / Swiss Franc
Near term, there is potential for weakness in the EURCHF below 1.5059 and towards 1.49 (61.8% of 1.4575-1.5450 and the 100% extension of the 1.5450-1.5059 decline). A drop to there may present an opportunity to position long against 1.4575 in anticipation of a rally through 1.5886 (5 waves up to 1.5886 and 3 waves down to 1.4575).
Euro / Canadian Dollar
The drop below the 55 day SMA and support line drawn off of the November 5, February 10, 24, and 26 lows argues for additional downside (below 1.5633), possibly to complete a complex correction from 1.7522. MACD has turned negative as well.
Euro / Australian Dollar
The EURAUD has dropped below the 200 day SMA, which brings forth the possibility that a longer term drop is underway. However, there is a pattern that warns of a bottom. Since the October high at 2.1174, it is possible that an A-B-C drop is nearing completion with wave B as a triangle. RSI is in oversold territory and turning up so a low may form soon. Watch 1.80 as a support level.
Euro / New Zealand Dollar
Remember, the long term objective is above 2.6171 (all-time high). The reason for this target is that a triangle unfolded from that point. Near term, the EURNZD has declined from the top of a parallel channel. The bottom of the channel is potential support and crosses 2.2155 today. The line increases 18 pips per day. Like the EURAUD, RSI on the EURNZD has dipped below 30 recently (and turned up).
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
