EUR/USD ââ,¬â€œ The EURUSD is right at support from the trendline drawn through 1.2456 and 1.2630 at 1.2660. Trendline support is reinforced by 9/8, 9/11, 9/26 and 9/27 daily lows ranging from 1.2647 to 1.2669. However, daily studies remain overwhelmingly bearish. Oscillators are all sloping down and below midpoints. Additionally, we got a bearish 22, 66 day SMA cross yesterday (1, 3 month). The 132 day (6 month) SMA is at 1.2656 ââ,¬â€œ 1 pip from todayââ,¬â"¢s low. A daily close below the trendline at 1.2660 bolsters the bearish picture. Any bounce from mentioned support targets yesterdayââ,¬â"¢s high at 1.2731.
USD/JPY ââ,¬â€œ The USDJPY continues to push higher towards the 9/18 high at 118.28. Price has rallied back above the supporting trendline drawn through 108.96, 113.95, and 155.55. Dealer RSI is overbought and has hovered near overbought for 2 days ââ,¬â€œ suggesting that upside risk is limited ââ,¬â€œ especially with the 118.28 high so close. An eight year resisting trendline is at 118.43 (line is below on chart). Time makes this trendline extremely significant. A major decline has occurred each time this line has held as resistance. Of course, if the resistance fails, then USDJPY could skyrocket towards the 2/3 high at 119.38 and the 12/5/2005 high at 121.38. A break below todayââ,¬â"¢s low at 117.50 could spark some selling interest and/or a liquidation scenario.
GBP/USD ââ,¬â€œ Cable has plummeted and is below the 2 month trendline drawn through 1.8176 and 1.8602. The break below the line bodes well for the longer term bearish picture but 240 minute RSI is rising from below 30 ââ,¬â€œ indicating that there may be an interim bottom at 1.8663. Initial resistance on a retrace is the trendline at 1.8740 (increases about 11 pips per day). Fibo resistance is not until 1.8819 (38.2% of 1.9072-1.8663). A move below 1.8663 targets the 9/11 low at 1.8602.
USD/CHF ââ,¬â€œ We mentioned yesterday that ââ,¬Å"It appears that a bullish ascending triangle formation is forming and scope remains for a test of the 1.2525-1.2622 resistance zone.ââ,¬Â� Price has skyrocketed to 1.2550 today ââ,¬â€œ which is the 78.6% of 1.2622-1.2288. A double top from the 7/19 and 9/15 highs at 1.2595 and 1.2622 looms as resistance going forward. The 22 day SMA has crossed above the both the 66 day and 132 day moving averages (1,3, and 6 month SMAs). This is a longer term bullish signal. Support on a pullback is the 9/28 high at 1.2489.
USD/CAD ââ,¬â€œ We remarked yesterday that ââ,¬Å"Wave structure remains bullish as the decline from 1.1294 follows a 5 wave rally from 1.1028 to 1.1294. In addition, support is reinforced by the 78.6% of 1.1028-1.1294 at 1.1085.ââ,¬Â� Yesterdayââ,¬â"¢s low was at 1.1085. Long wicks below the bodies of recent daily candles denote strong support at this juncture. A break above 1.1205 improves the outlook for bulls but it takes a dip below 1.1028 to negate bullish implications from the mentioned 5 wave rally.
AUD/USD ââ,¬â€œ We have continues to reiterate that probability favors a break lower rather than higher. The pair has broken below the range low at .7481 and is now testing fibo support at .7443 (61.8% of .7270-.7721). Additional weakness exposes the 7/19 low at .7403. This may very well be a 3rd wave (either a C or a 3) ââ,¬â€œ if it is, then weakness should persist until at least .7333 ââ,¬â€œ which is where wave A (or 1) would equal wave C (or 3). The break of the recent range favors an impulsive move. Resistance on a pullback is the former range low at .7481.
NZD/USD ââ,¬â€œ The decline that began on 9/26 has stalled at the .6500 figure ââ,¬â€œ testing .6504 this morning. Wednesdayââ,¬â"¢s commentary focused on the phenomenon that is a 100 pip move in NZDUSD and what that typically has meant for the currency pair. Traditional technical indicators also resonate a bearish tone. CCI has declined from below 100, RSI has declined from below 70, and MACD slope is negative. A break below .6504 exposes the trendline drawn through .5927 and .6342 ââ,¬â€œ the line is at .6450 today. Only a push above an intraday pivot low at .6650 from 9/26 negates the bearish view.
Jamie Saettele is a Technical Currency Analyst for FXCM.