EUR/USD The EURUSD has treaded water for the last few days trading mostly between 1.2750 and 1.2850. Tight Bollinger bands on the daily indicate breakout potential. A shorter term triangle (shorter term than the one discussed yesterday) has formed following the 8/10 high at 1.2911. The apex is at 9/25. Following the theory that price typically breaks through its triangle two-thirds to three-fourths of the way through the triangle, we would expect a breakout to occur anywhere from 9/11 to 9/15. With the trend leading up to the triangle, we maintain a cautious bullish bias and are looking for a thrust higher to complete the uptrend from 1.1640.
USD/JPY The USDJPY is nearing support from the 61.8% fibo of 113.95-117.49 at 115.30. 5 waves down from 117.49 combined with hourly RSI bullish divergence suggests that a short term bottom is forming. A rally probes todays high at 116.18. The longer term picture is turning more bearish. Price has broken below the 200 day SMA today (116.01) and a trendline from 108.96 (near 115.81). Continued weakness targets the aforementioned fibo support at 115.30 and the 8/17 low at 115.17.
GBP/USD We mentioned on Friday that Yesterdays doji (daily) may be the beginning of the end for bulls?A break below former resistance at the 1.9000 figure would begin to suggest that a reversal is in play, but only a break below 1.8775 (nearly 300 pips away) confirms a reversal. The latest COT readings (little commercial buying and extremely long speculative positioning) may also limit upside potential. The pair topped out on 8/31 at 1.9091 and price currently trades below the 1.9000 figure. Oscillators on the daily are turning down. Cable is nearing support from the 9/1 low at 1.8955. A break below there probes the 61.8% fibo of 1.8775-1.9090 at 1.8896. On a bounce higher, resistance is at the 9/4 low at 1.9029.
USD/CHF The USDCHF trades within a triangle (just as EURUSD does). The pair bounced off of triangle support on 8/31 at 1.2227 and continued strength probes the resisting line from the triangle near the 1.2400 figure. Hourly oscillators are declining from overbought/close to overbought levels indicating that a top may be near. Price is currently testing resistance from the confluence of the 10/20 day SMA at 1.2327/31. The bias is neutral until a break of the mentioned triangle (below on chart).
USD/CAD The USDCAD is rallying as we anticipated. Price is currently at resistance from the 8/29 high at 1.1128. A break above 1.1128 probes the 38.2% fibo of 1.1456-1.1028 at 1.1191. However, the short term move may be overextended with hourly RSI above 80. Immediate support is at yesterdays high at 1.1074. The bias is bullish as long as 1.1028 holds.
AUD/USD The AUDUSD has made a double top (recent high is slightly higher) with the 8/10 high at .7713. In addition, bearish divergence with daily oscillators favor a reversal to the downside. The beginning of that move lower may be underway as the pair has retreated about 40 pips from the .7718 high. Supporting the reversal idea is the presence of the upper Bollinger band (daily). Meaningful support is not until the confluence of the trendline from .7549 / 38.2% of .7549-.7718 at .7653.
NZD/USD Kiwi has also turned lower at its upper Bollinger band (daily). Resistance is reinforced by the 50% fibo of .7198-.5927 at .6563. Oversold conditions combined with support from the 8/16 high at .6439 have checked the decline today. There are 5 waves up from .5927 thus probability favors a decline in 3 waves to correct the 5 wave move. Fibo support begins at .6330 (38.2% of .5927-.6580).
