Near term, expect decent sized setbacks in Yen crosses. EURJPY support is concentrated near 135 and GBPJPY support at 148 and 147.
Euro / British Pound
Barring a break below .8995, I maintain that a 4th wave low is in place at the confluence of the 38.2% retracement of wave 3 / Elliott channel support / previous 4th wave extreme. A move to a new high in wave 5 (above .9416) is favored. .9075 is potential support
Euro / Swiss Franc
“There is little to say about the EURCHF technically and there will not be until the pair breaks from the triangle. The fight between bulls and bears wages on in a triangle that has been underway since October. Triangles are typically continuation patterns, so a downside break seems more probable. Still, forecasting is an exercise in probabilities rather than certainties so jump the gun at your own risk. Pushing through either the top of bottom line triangle line would present a breakout opportunity.” The triangle count shown above is bearish but a bullish outcome is possible too. Wave a would be A and wave B would be a triangle.
Euro / Canadian Dollar
A head and shoulders top has been unfolding since January 2008. The left shoulder was complex with 2 shoulders. H&S patterns tend towards symmetry and I suggested last week that the EURCAD would rally to 1.6330 in order to form another right shoulder. This scenario remains on track. Price is testing the 200 day SMA today and near term studies warn of a pullback. 1.5600/60 is support.
Euro / Australian Dollar
We viewed short term price action last week and concluded that “a rally above 1.6310 would break a series of lower highs, at least in the short term. This would be the first sign of a bottom.” The EURAUD has yet to break that level but additional reversal evidence can be gleaned from the weekly chart. A hammer (or key reversal on a bar chart) formation occurred last week and weekly RSI is below 30. Failure to hold the low would expose 1.5920/1.6040.
Euro / New Zealand Dollar
The EURNZD has bounced from a downward sloping line extended from the 6/22, and 8/14 lows (line also cuts through 3 days this month). RSI has not confirmed the low (divergence), which leaves the downtrend weak technically and at risk of reversing.
Euro / Japanese Yen
3 waves up from 129 look complete in the EURJPY. As such, a 4th wave is probably underway towards 134.75-136.10 (former 4th wave area). The 38.2% retracement of wave 3 is at 135.10 (lower portion of the zone). I’ll be looking for signs of a low near 134.75-135.10 in order to get long for wave 5, which will probably carry the EURJPY through 139.20 (new 2009 high).
British Pound / Japanese Yen
I wrote Friday that “5 waves are clear from the 139.68 low so one would expect to find support in the former 4th wave, which is 147-149.40. The larger pattern depends on how the price pattern in the circled area is interpreted. Treating that as a triangle and 5th wave thrust would indicate that the 5 wave rally from 139.68 is wave A of an A-B-C correction. Treating the circled area as wave A and B of an expanded flat would indicate that the 5 wave rally is wave C and that a corrective rally is over. Given the USDJPY pattern (along with the EURJPY), the former seems more likely. Near term, weakness is favored regardless in order to correct the 5 wave advance.” Favor weakness near term with support coming in at 148.10 then 147.00.
Swiss Franc / Japanese Yen
The CHFJPY is in the same position as the EURJPY. Favor weakness in wave 4 down to 88.80-89.70 before a push to a new high.
Canadian Dollar / Japanese Yen
A new high (above 90.41) is expected eventually since the decline from there is viewed as a complex correction (a-b-c-x-a-b-c). As suggested last week, wave 4 may be unfolding as a triangle or flat (flat seems more likely). Coming under 85.91 would expose 85.30 (100% extension of what is wave a of 4). Only a drop below 84.23 would suggest that a more important top is in place.
Australian Dollar / Japanese Yen
Daily RSI(14) has rolled over from above 75 and the rally from 76.30 can be treated as a completed 5 wave advance. Also warning of at least a setback is RSI divergence at the high. Initial support is 82.80, then 82.05.
New Zealand Dollar / Japanese Yen
The NZDJPY reversed from a line drawn off of January, April, and June highs. Daily RSI has rolled over from an overbought condition. Favor at least a drop to test support, which is now 66.40. A longer term top would be signaled by a break below the support line extended from the February, July, and October lows.
Written by Jamie Saettele
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