Euro Probes Trendline
Japanese Yen Continues Sideways
British Pound Sliding
Swiss Franc Cant Take 1.2400
Canadian Dollar Volatility Contracts In Triangle
Australian Dollar Holds Sub-.7300
New Zealand Dollar Continues To Plummet
EUR/USD Resistance at the downward sloping trendline has held the past two days but the decline has been corrective and choppy. The rally from 1.2481 appears far more convincing at this point than the correction from 1.2618. Yesterdays low held at support from the 61.8% and 78.6% fibos of 1.2481-1.2618 between 1.2533 and 1.2510. A break above the mentioned resisting trendline could propel the pair to the confluence of the 6/22 high / 38.2% of the 1.2976-1.2481 at 1.2670/77 as well as the 50% fibo at 1.2728.
USD/JPY USD/JPY continues to hold above the 116.00 figure and trade in a tight range. The 200 day SMA is still support, now at 116.09 but a long outside doji on the daily two days ago gives scope to a reversal. If support from the 6/23 and 6/25 lows at 115.76/85 does not hold then the pair probes the 6/21 low at 114.38. However, the ability of the pair to hold above the 200 day SMA certainly can not be overlooked and as long as price does remain above then a test of 118.37 is possible (where 1 would = 5 in the rally from 108.96 see calculation in table below).
GBP/USD Cable has broken below a consolidating channel that began on 6/23 at 1.8132 and the pair continues to slide. The upward sloping channel topped out at 1.8415 and the pair has since broken down below 1.8200. With the break below the short term support line, the intraday pattern looks like a completed head and shoulders continuation pattern. Support is at yesterdays 1.8144 low. Hourly momentum to the downside is slowing but is still down and scope remains for a test of the confluence of the 6/23 low / 50% of 1.7229-1.9025 at 1.8132. A bounce to the upside encounters resistance at yesterdays high of 1.8238 which is followed by the 38.2% fibo of 1.8468-1.8132 at 1.8259.
USD/CHF As the inverse of EUR/USD - USD/CHF bounced off of a supporting trendline from the 6/5 low at 1.2014. Hourly oscillators are more or less moving sideways indicative of the sideways trading seen the past few days. Fibonacci extensions of 1.1919-1.2299 place targets for a potential top at 1.2541 (138.2% - very close to Fridays high of 1.2525) and 1.2629 (161.8%). Still, chart structure on the daily shows that the rise from 1.1919 is corrective when compared to the preceding decline. The diagonal triangle appears to be coming to an end as evidenced by the proximity of the apex. A sustained break below the 1.2335/47 (former resistance) would do wonders for bears.
USD/CAD As volatility has contracted significantly in USD/CAD an ascending triangle has formed over the last month. As we are nearing the apex of this ascending triangle, a break to the upside above the ceiling of resistance established by a series of daily highs between 1.1250/72 is imminent. Additionally, the rallies from 1.0960 to 1.1252 and 1.1036 to 1.1283 appear impulsive and in 5 waves and the corrections of those moves are in 3 waves, reinforcing a bullish stance. As shown on the hourly chart below each low is higher; evidence that a low is already in place. A break above 1.1283 could very well test the 61.8% fibo of 1.1771-1.0927 at 1.1447. A failure sends the pair back in the range with support at the 6/26 low at 1.1172.
AUD/USD Yesterdays break below the 3/6 low at .7392 negates any bullish implications from the hammer at the 61.8% fibo of .7014-.7791 at .7312 on 3/6. Price now probes the 4/13 low at .7237. Price has bounced off of yesterdays low at .7270 but is resisted by the 6/23 low at .7304 (as well as the psychological .7300). The confluence of the 10 day SMA / 6/27 high at .7340/48 is resistance on a break above .7300.
NZD/USD As we have focused on the past few days, Kiwi seemed poised to test the .5991 level and it did, subsequently breaking lower and now probing the 5/18/04 low at .5909. The break below the .5991 low on 3/29 confirms that we are in the 5th wave of a downtrend that began on 3/16/05 at .7462. As such, the measured objective for wave 5 is .5664. This is where wave 5 (beginning at .6443) would equal wave 1 (.7462-.6683). This price area is also suggested by a series of daily lows in August 2003 from .5632 to .5650. Resistance is now at the former support level of .5991 and yesterdays low of .6020.
Glossary of Terms
<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
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 <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />AverageTrueRange (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
<?xml:namespace prefix = v ns = "urn:schemas-microsoft-com:vml" />
