Euro Cant Shake 1.2700
Japanese Yen Holds onto 118.00
British Pound Bounces From Below 1.8800
Swiss Franc Testing 1.2500
Canadian Dollar Edges Towards 200 SMA
Australian Dollar Probes Trendline
New Zealand Dollar Head and Shoulders
EURUSD Bollinger band width has contracted even more to 118 pips. The picture has not changed much, and as we said yesterday, The all time low is 115 (8/12/1998) and that is with synthetic DEM prices. In any case, the tight Bollinger bands warn us that a breakout is on the horizon. The 1998 scenario gave way to a 1,500 pip move over a 2 month span. Additional strength from yesterdays 1.2669 low encounters trendline resistance near 1.2790 (drawn through 1.2938 and 1.2827). Still the points to reference for breakouts are 1.2829 (9/22 high) and 1.2630 (9/15 low).
USDJPY The USDJPY continues to trek higher within an upward sloping diagonal triangle which is often followed by violent declines. A break below 116.07 would significantly improve the bearish argument. A rally above 118.39 negates the interpretation and suggests that price is headed towards the 2/3 high at 119.38.
GBPUSD GBP/USD continues to move with bearish momentum as hourly RSI has just fallen into oversold territory below 30 but is holding above short term support at the 38.2% fibo of 1.8632-1.8897 at 1.8733. Daily charts also show the pair nearing a supporting trendline from the 7/18 low of 1.8180. A break below this line could perpetuate further moves down towards the 9/11 low of 1.8602. However, a bounce higher from the trendline could find GBP/USD continuing to hold range bound.
USDCHF Nothing has changed regarding the USDCHF in the last 24 hours. The pair has continued its rally off of the 1.2400 figure and is headed back to the upper end of the ascending triangle (bullish) near 1.2600. 22 day momentum remains positive and RSI is steadily increasing (near 60 now). The 200 day SMA is at 1.2578 and a break above would indicate a major change in trend. Support remains the 10/2 low at 1.2404.
USDCAD The impulsive rally to the 1.1300 figure reinforces the bullish bias against 1.1028. It looks like the USDCAD may make one more high (above 1.1305) to complete a 5 wave rally from 1.1085 before a deeper retracement takes place. Therefore, near term potential for strength looks limited. The 200 day SMA is just above at 1.1320. A push above there would be more evidence of a long term change in trend. Immediate support is yesterdays low at 1.1218.
AUDUSD Despite gains made by the Aussie yesterday, we maintain our bearish bias as the pair holds under a trendline drawn on the 240 minute chart from the 9/5 high, along with the move below the 200 day SMA. .7443 remains initial resistance but the former range high at .7573 must hold in order to keep the bearish bias intact.
NZDUSD The Kiwi is approaching the 50.0% fibo of .6721-.6486 at .6604. 240 minute RSI recently came off from overbought territory and a short term head and shoulders pattern is visible. Furthermore, the dip below the 10/3 high at .6617 re-instills confidence in the downside. Price must remain below .6721 to keep the bearish structure intact so risk is limited at this point. A break below the 10/2 low at .6486 completes the head and shoulders reversal pattern.
