Euro / US Dollar
We must respect the possibility that a top is in place for the EURUSD since there is a mound of evidence that suggests as much. Last week’s key reversal is bearish as is the fact that the EURUSD failed to break above its December high but the USD index did break below its December low before reversing. This sets up a nonconfirmation / divergence that was last seen at the July 2008 EURUSD top (the opposite occurred then…USD index failed to make a new low but the EURUSD did make a new high). Structurally, wave C would be treated as a truncation. Coming under 1.4000 would confirm a top but we may be able to confirm a top before then if the EURUSD decline from 1.4450 turns into an impulse.
British Pound / US Dollar
The GBPUSD break above 1.6750 was from a triangle and thrusts from triangles are terminal (meaning that they complete larger degree moves). Specifically, the rally completes wave v of C of 5 (the entire rally from 1.3500).
Australian Dollar / US Dollar
The AUDUSD has broken above its June high, confirming that wave C (as well as the entire rally from the October low) is in its final stages. We have yet to see the degree of weakness from the top that is evident in the EURUSD and GBPUSD but RSI divergence as well as the patterns in the EURUSD and GBPUSD do warn of a reversal.
New Zealand Dollar / US Dollar
The NZDUSD is in the same position as the AUDUSD. The break to a 2009 high indicates that wave v of C is underway and possibly complete. Although anticipating a reversal, there is no evidence of one yet. Potential resistance is at .6958. A drop below .6467 would suggest that a top is in place.
US Dollar / Japanese Yen
The USDJPY has failed to accelerate lower, thus it is more likely that the decline from 101.50 is corrective, just as the rally from 87.10 is corrective. In other words, everything from the 2009 low is a correction and will eventually be retraced, but not before a push above 101.50. Short term support is in the 96.40/75 zone.
US Dollar / Canadian Dollar
The entire rally from 1.0782 has now been retraced. However, the drop below 1.0782 may be wave Y in a complex W-X-Y corrective decline from 1.3068. Daily RSI has turned up from oversold (which was also divergent with the low). An impulsive rally from the low would be evidence of an outright reversal.
US Dollar / Swiss Franc
The USDCHF pattern is the same as the EURUSD pattern (but as the inverse). Wave C within the A-B-C corrective decline from 1.2303 may be truncated and therefore complete. Trading above 1.0939 would confirm the reversal.
British Pound / Japanese Yen
The underside of a former support line is now serving as resistance as the GBPJPY pierced the June high of 162.64. There is potential support from a shorter term line drawn off of the July 13 and 29 lows at 158.45 today. That line increases above 60 pips per day.
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, GBP on Thursday, AUD on Friday), 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.
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Al Bawaba
Mounting evidence suggests that the US dollar has turned from an important low. A drop below 1.4000 in the EURUSD would confirm that a EURUSD top is in place.
