Japanese Yen Continues To Weaken
British Pound Little Changed
Swiss Franc Stuck In Range
Canadian Dollar Breaks Resistance
Australian Dollar At Upper Bollinger Band
New Zealand Dollar Looking Bid
EUR/USD From yesterday The bullish divergence on the hourly at the 1.2705 low gives scope to a continued rally to test the 38.2% fibo of 1.2859-1.2705 at 1.2763 with additional resistance at former intraday support from Sunday at 1.2783. The next big move is likely down in a C wave decline to correct strength to 1.2859 with support at the 61.8% fibo of 1.2481-1.2859 at 1.2626 and the 78.6% fibo at 1.2562. Another rally to challenge tonights 1.2779 high is possible but well stick with the view that the next big move is down towards the confluence of the 61.8% fibo of 1.2481-1.2859 at 1.2625. This is also where the decline from 1.2859 to 1.2705 would equal the decline from 1.2779 (a = c) is very close to the 6/27 high at 1.2618 (circled).
USD/JPY It is possible that a move higher ended at 114.86. The rally from113.42 has taken the shape of a 3 wave (a-b-c) correction. Waves a and c in a correction are often close to equal, thus we can look for an end to the correction up by adding the price length of wave a to the start of wave c. This calculation is 113.89 + (114.41-113.42) = 114.88, which is also the 61.8% fibo of 115.77-113.42 and the 7/6 low. If 114.86 holds as resistance, then price is headed back down to fibo levels / congestion between 114.31-113.97. A break higher would probe the confluence of the 78.6% fibo of 115.77-113.42 / 7/7 high at 115.27/33.
GBP/USD Cables is little changed from yesterday. The pair has rallied to the 61.8% fibo of 1.8539-1.8363 at 1.8472 and looks to have comleted 3 waves up to that point, suggesting that the path is down to the the supporting trendline from the channel around 1.8380. A break lower probes the 50% fibo of 1.8090-1.8539 at 1.8314 and then the confluence of the 61.8% fibo of 1.8090-1.8539 / 6/27 high at 1.8262. Todays high at 1.8480 is immediate resistance as is the 78.6% fibo of 1.8539-1.8363 at 1.8501.
USD/CHF USD/CHF may have completed the second wave of a 3 wave (a-b-c) corrective pattern at 1.2250 this morning. As a result, price would now be headed up to test the 61.8% fibo of 1.2525-1.2190 at 1.2397. Reinforcing this opinion is the fact that wave a would equal wave c at 1.2390 (if 1.2250 holds as support) and the 6/27 low is at 1.2397 as additional resistance. A break below the 1.2250 low from today would favor a test of the 7/7 low at 1.2190.
USD/CAD From yesterday, The bias remains bullish as the pair trades within the ascending triangle that began in mid May. A break above the 6/23 high at 1.1283 argues for a test of the 50% fibo of 1.1771-1.0927 at 1.1349. The pair is currently testing the 1.1350 level and a break higher would expose the 4/11 low at 1.1425. The break above the ascending triangle is bullish but the hourly oscillators show bearish divergence at the moment. Bearish divergence combined with the fibo level at 1.1349 and the presence of the upper Bollinger band on the daily give scope to a minor setback before additional gains.
AUD/USD Aussie pushed past resistance from the 7/7 and 7/10 highs at .7528/30 and now probes the 61.8% fibo of .7791-.7270 at .7592. The pair is similar to USD/CAD in that both pairs have broken resistance levels but both hourly charts show slowing upside momentum. As such, a correction / period of consolidation could send price back to the .7530 former resistance level, which would now be support.
NZD/USD Kiwi was finally able to hold a break above .6120 resistance. The move up looks healthier than that of AUD/USD. For example, Aussie trades at its upper Bollinger band on the daily and Kiwi trades just above its 20 day SMA suggesting that Kiwi has more left in the tank. Also on the hourly, bearish divergence with RSI is pronounced on the Aussie chart but not on the Kiwi chart. That said, Kiwi is at the 50 % fibo of .6428-.5927 at .6178. Additional resistance is above at the 6/21 high of .6222.
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 day Average True Range (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
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