Euro Surpasses 1.50, Fib Extension Presents The Next Bullish Target

My EURUSD target has been met and exceeded relatively quickly. After surpassing a record high and the psychologically important 1.5000, the world’s most liquid pair is now without a clear target for bullish momentum to mark. My next objective will be defined by major Fib extensions. While the lesser followed extension levels begin around 1.5325, the more popular 168.2% offers euro bulls a considerable amount of breathing room up to 1.5615. Before EURUSD meets this distant target however, retracements are very likely. I will treat pull backs as opportunities to add to my bullish bias until spot pulls back within the wedge that had confined price action from November through the end of February.

EUR/USD

Strategy: Bullish against 1.4800, Targeting 1.5325

My EURUSD target has been met and exceeded relatively quickly. After surpassing a record high and the psychologically important 1.5000, the world’s most liquid pair is now without a clear target for bullish momentum to mark. My next objective will be defined by major Fib extensions. While the lesser followed extension levels begin around 1.5325, the more popular 168.2% offers euro bulls a considerable amount of breathing room up to 1.5615. Before EURUSD meets this distant target however, retracements are very likely. I will treat pull backs as opportunities to add to my bullish bias until spot pulls back within the wedge that had confined price action from November through the end of February.

GBP/USD

Strategy: Bearish against 2.0035, Targeting 1.9400

Bucking the trends that have developed across many of the other majors, GBPUSD has been consigned to the broad range between 1.9975 and 1.9400. This congestive price action interrupts the development of a medium-term bear wave from the November swing high; yet I am not yet comfortable in aligning my long-term bias to this still young move considering GBPUSD’s dominate trend over the past six years has been bullish and the US dollar continues to succumb to fresh record lows. Until pound bulls can overtake 2.0035 or a sharp drop clears support around 1.9335, I will look to take advantage of the range conditions.

USD/JPY

Strategy: Bearish against 105.75, Targeting 100.00

It took quite a bit of time of congestive price action; but USDJPY has finally found directional price action. The breakout move was established in a sharp drop through 107.00 that easily cleared a closely monitored rising trend channel. As impressive as this move was, I remained on the sidelines until spot cleared its three year low, psychological benchmark at 105.00. I am once again, firmly set in my long-term bearish bias, targeting the nearest Fibonacci extension levels. The 150% extension of the 12/27 to 1/23 down leg happens to fall at the fundamentally significant 100.00 level. Given the Bank of Japan’s history of currency market intervention at this exact level, it seems an appropriate target.

USD/CHF

Strategy: Bearish against 1.0850, Targeting 1.0200

It took a couple of months, but the market has once again taken direction in USDCHF. Last week, spot had fallen to met its former record low by the end of the same session that I provided my analysis. The following day’s break was momentous and showed little to no hesitation. Encouraged by this impressive move, I reestablished my short bias. My initial target is close at hand on the 161.8% extension of the 12/21 to 2/01 downleg. However, a bounce from these levels may be just that: a short-lived rebound for long-term bears to get back into the market at a better price. A longer-term, yet still very near target, is for USDCHF to reach parity.

USD/CAD

Strategy: Flat, waiting for confirmed move below 0.9550 or the bull trend to retake 1.0200

USDCAD sustained the selloff that had begun last week. Momentum had easily carried the pair through the 38.2% retracement of the dominate 11/7 to 1/22 bull rally. However, fib congestion from this same move would ultimately offer at least temporary relief from the developing selloff at the 50% retracement level at 0.9715. The rebound from this level seems promising; but I will hold off from reestablishing a long bias until bulls can retake 1.02 as the recent bear swing brought USDCAD to its lowest level in over three months.

AUD/USD

Strategy: Bullish against 0.9050, Targeting 1.0000

A record breaking run has taken the Australian dollar to a multi-decade high against its American counterpart. Currently, the pair is undergoing a correction – not surprising considering the 1000 point advance the AUDUSD has traversed in a little over six weeks. I will tolerate a drawdown in my long bias until 0.9050. However, even if I am taken out of the market on a AUDUSD decline, I will treat it as a pullback unless spot drops below the 61.8% retracement level of the recent 1/22 to 2/28 rally. With a record high no longer a benchmark, the next reasonable bullish target is parity.

NZD/USD

Strategy: Bullish against 0.7850, Targeting 0.8275

Bullish momentum gave way shortly after NZDUSD overtook 0.81 – the high water market for the pair since it was allowed to freely float by the Reserve Bank of New Zealand over two decades ago. My bullish sentiment will remain intact until there is a clear and significant reversal in price action. At the same time, I will not sit through a deep drawdown to keep with my bullish convictions. I will hold to my long positioning against 0.7850 and target the 161.8% extension of the 1/15 to 1/22 downswing. Should spot drop below my support, I will stay out of the market until the market has found a floor and bulls have undoubtedly retaken control.

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