Last week, we expected the Euro to retrace to near 1.58 before continuing lower towards 1.5340. The bullish pull-up did not materialize as the pair collapsed to stabilize above 1.5415, the 38.2% Fibonacci retracement of the 02/07-04/22 rally. This appears to be a near-term bottom, with a relief rally taking the pair to test the 23.6% Fib at 1.5645. Our bias has been established as bearish following the upward-sloping trend break after the pair tested 1.60. We will look to short EURUSD below 1.5645 aiming to participate in a continuation of the downtrend to the 50% Fib at 1.5229.
Fibonacci Forum.
EUR/USD
Strategy: Bearish below 1.5645, Targeting 1.5229
Last week, we expected EURUSD to retrace to near 1.58 before continuing lower towards 1.5340. The bullish pull-up did not materialize as the pair collapsed to stabilize above 1.5415, the 38.2% Fibonacci retracement of the 02/07-04/22 rally. This appears to be a near-term bottom, with a relief rally taking the pair to test the 23.6% Fib at 1.5645. Our bias has been established as bearish following the upward-sloping trend break after the pair tested 1.60. We will look to short EURUSD below 1.5645 aiming to participate in a continuation of the downtrend to the 50% Fib at 1.5229.
For more resources on the EURUSD, please visit the DailyFX Euro Currency Room.
GBP/USD
Strategy: Bullish against 1.9683, Targeting 1.9903
The Pound has been oscillating erratically in the past several weeks, testing through higher levels of Fibonacci resistance only to drop back to where it started. We have indentified an upward-sloping support line connecting recent lows. Price action is now wedged between this and the 23.6% Fibonacci retracement of the 03/14-04/15 down move. We see GBPUSD try for another bullish run past this level to test the 38.2% Fib at 1.9903. Should this level fail to be overcome yet again, bears may regain enough confidence to take the pair below trend line support.
For more resources on the GBPUSD, please visit the DailyFX British Pound Currency Room.
USD/JPY
Strategy: Bullish against 104.00, Targeting 107.37
We had originally advocated being long USDJPY two weeks ago with the pair trading near 102.92, the 38.2% Fibonacci retracement of the 12/27/07-03/17 decline. Our target throughout this period has been a breach of the 105.00 level to hit the 50% Fib level, a task accomplished by last week’s close. The pair failed to hold above this level and has started to decline back to trend line support. We remain bullish and will be looking to re-enter long just above 104.00 targeting a re-test of the 50% Fib with a break higher taking USDJPY to the 61.8% level at 107.37.
For more resources on the USDJPY, please visit the DailyFX Japanese Yen Currency Room.
USD/CHF
Strategy: Bullish against 1.0375, Targeting 1.0547
Last week’s impressive dollar rally took USDCHF to through resistance to hit our target at 1.0547, the 61.8% Fibonacci retracement of the 02/13-03/17 decline. Price action has stalled here, with a Star candlestick at resistance seeming to indicate the next move to be a retrace lower. We continue to be bullish on USDCHF, and will be looking for a pullback to the 50% Fib level at 1.0375 to enter long for a continuation of the rally. Should the pair break 1.0547 on the next attempt, we see price action extend above 1.07.
For more resources on the USDCHF, please visit the DailyFX Swiss Franc Currency Room.
USD/CAD
Strategy: Bullish against 1.0100, Targeting 1.0200
Canadian dollar price action validated last week’s analysis, rising from trend line support to rest above 1.02. That said, our profit target at 1.0250 proved too ambitious. USDCAD reached as high as 1.0236 and closed the week at 1.0188. The pair has now retraced all the way back to trend line support at 1.0100. That support is made stronger by the close proximity of the 61.8% Fibonacci retracement of the 01/22-02/28 decline at 1.0121. Without a daily close below trend line support, we continue to favor the bullish scenario and a return back above 1.02.
For more resources on the USDCAD, please visit the DailyFX Canadian Dollar Currency Room.
AUD/USD
Strategy: Bullish against 0.9287, Targeting 0.9500
Last week we were looking to go long AUDUSD following a pullback to the 61.8% Fibonacci retracement of the 02/28-03/20 decline at 0.9287, aiming for a return to test 0.9500. AUDUSD proceeded to do just that, hitting Fib support before moving higher with prices about 40 pips away from 0.9500 as of this report’s publication. A decisive break above this level would put AUDUSD at levels unseen since the early 1980s. We will continue to hold long as the trade plays out.
For more resources on the AUDUSD, please visit the DailyFX Australian Dollar Currency Room.
NZD/USD
Strategy: Bearish against 0.7940, Target TBA
Last week we advocated to short NZDUSD near 0.7850 targeting a decline to 0.7700. The pair came within 24 pips of our target and proceeded to reverse higher. This week, we look at a larger Fibonacci retracement spanning the 07/27/07-08/17/07 decline that saw NZDUSD fall nearly 1500 pips in less than a month. We see that the most recent downward break past trend line support was contained at the 76.4% Fibonacci retracement at 0.7757. The pair then moved higher and will likely continue to do so until a test of trend line support-turned-resistance near 0.7940. We will look to enter short from there as the bearish trend resumes.
For more resources on the NZDUSD, please visit the DailyFX New Zealand Dollar Currency Room.
To contact Ilya regarding this or other articles he has authored, please email him at [email protected].
