· Euro Breaks 1.2800<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
· Japanese Yen Sideways
· British Holds 1.8400
· Swiss Franc Targets 1.2200
· Canadian Dollar Continues To Range
· Australian Dollar Weekly Reversal Candle
· New Zealand Dollar Crosses 10 day SMA
EUR/USD The pair has reached and passed measured objectives at 1.2730 and 1.2787 and the pair now probes the 78.6% fibo of 1.2976-1.2481 at 1.2870. If 1.2760 was the bottom of wave 4, then the pair could very well test 1.2897, which is where wave 5 would equal wave 1 (1.2618-1.2481). The heavily traded pair does trade right at the upper Bollinger band on the daily and support is at the 7/3 low of 1.2760 as well as former intraday resistance on 6/30 at 1.2730.
USD/CHF USD/CHF has found support at the 50% fibo of 1.1919-1.2525 at 1.2223. On the hourly, a short term triple bottom is present with the last 3 days lows at 1.2226, 1.2218, and 1.2225. With the pair at 1.2240, risk is certainly limited to the downside in the short term. The high from 7/3 at 1.2275 is initial resistance. If 1.2275 hold, then USD/CHF could very well test 1.2145. This is where the length of wave 1 would equal the length of wave 5 and is also very close to the 61.8% fibo of 1.1919-1.2525 at 1.2149.
USD/CAD The supporting trendline that began on 5/31 at 1.0927 continues to hold. The picture would be bearish on a sustained break below the trendline. Until that happens, risk is limited to the downside and USD/CAD continues to trade in an ascending triangle. USD/CAD does appear headed higher after bouncing off of the trendline late on 7/3. Resistance is at the 7/3 high / 61.8% fibo of 1.1262-1.1077 confluence at 1.1186/91. A break above that level would expose the 78.6% fibo of 1.1262-1.1077 at 1.1222. The mentioned trendline is at around 1.1100 and a break lower targets the 6/30 low at 1.1077.
AUD/USD AUD/USD trades at the 200 day SMA at .7434. Last weeks candle is rare in that it took out the prior weeks low, high, and closed above the prior weeks high. When combined with the opposite instance (closing below previous low), this has happened just 49 times since 1976 24 times to the long side and 25 times to the short side. The candles is circled in the chart below along with the previous instance in January. The average favorable move (when taken from the close of the engulfing candle) is 465 pips and the average adverse move is 303 pips. Continued strength could test the 6/9 high at .7503. Initial support is at yesterdays low of .7411.
NZD/USD Kiwis rally was rejected by the 38.2% fibo of .6428-.5927 at .6118. A push past there would encounter resistance at the 5/22 low of .6142. This level must hold for any bearish bias to remain. Kiwi currently trades at the 10 day SMA at .6071. Initial support is at the 7/3 low of .6050. Daily oscillators are sloping up with RSI and CCI close to midpoints of 50 and 0.
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 dayAverageTrueRange (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
