The greenback remains rangebound, although most major US dollar crosses are pressing against the top of their 2009 highs. The USDJPY is on a path lower towards the July low of 91.74.
Euro / US Dollar
Until a break above 1.4452 or below 1.4044, there is no directional bias. A rally above the range high opens up the door for an extension to the December 2008 high of 1.4720. Coming under 1.4044 would suggest that an important top is in place and that the longer term bear that began last summer has resumed.
British Pound / US Dollar
If a 4th wave triangle ended at the end of July, then the subsequent rally to 1.7050 was a terminal thrust and a significant top is in place. A drop below 1.5800 is required in order to confirm hat a top is in place however. Staying above there keeps open the possibility that an ending diagonal is unfolding from 1.5800.
Australian Dollar / US Dollar
As the AUDUSD nears its 2009 high, the bearish short term pattern has been called into question yet remained valid. A drop below .8151 would negate any bullish potential and open up a move to .7700.
New Zealand Dollar / US Dollar
Coming under .6640 would negate the blow-off top scenario that I have discussed in recent days and also mean that channel support (since March) has been broken. Divergence at multiple degrees of trend favors bears.
US Dollar / Japanese Yen
After a false break through channel resistance, the USDJPY is back below both the 55 and 200 day moving averages. The pair has failed at the 38.2% of the decline from 97.81. 93.00 is potential support and only a break below 91.73 would eliminate the larger range and give scope to a test of 87.00 and legitimate breakdown. Risk on shorts can be moved to 95.10.
US Dollar / Canadian Dollar
The USDCAD is similar to the EURUSD in that until the pair breaks its range, there is no directional bias. It is possible that a b wave (wave b of y within a complex correction w-x-y from 1.3068) is unfolding from 1.0631. Wave b could take the form of a triangle or flat at this point so even a rally above 1.1130 does not necessarily give bulls the green light.
US Dollar / Swiss Franc
Failure to stay above 1.0561 suggests that the USDCHF is headed for a test of the December 2008 low at 1.0367. However, the decline has failed to accelerate so wave C from 1.1973 may be complete. A rally above channel resistance would confirm a low.
British Pound / Japanese Yen
Bigger picture, the pair remains in a large range (146.70-163.00) and 150.00 is potential support before the range low. Former support at 153.50 is resistance now (and has held to this point). Potential trendline resistance drawn off of the 8/10 and 8/24 highs reinforce the level.
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) and the DFX Trend Index every day after the NY close. He is also the author of Sentiment in the Forex Market. Follow his intraday market commentary at DailyFX Forex Stream. Contact Jamie at [email protected]
