In forex, the markets are watching a fixed game with the USD/Chines yuan (USD/CNY), leaving plenty o...
Quick Updates on Popular Currency Pairs
09/18/2009 12:01 am EST
The EUR/USD has exceeded the December 2008 high and is approaching 1.4850 (a 100% extension), which is a potential target. The line extended from the March and June highs is also a potential target-that line is at 1.5160 this week and increases about 60 pips a week. RSI is above 70, divergent with the December high (RSI reached 79 then) and former trend line support turned resistance is right at current price. The risk of a bearish reversal is high, but until there are signs of such (candle pattern or short-term wave pattern, for instance), it is dangerous to be short.
British Pound/US Dollar
On the daily, a potential head-and-shoulders top is evident (although the pattern cannot be confirmed until price breaks below the neckline, which is near 1.6200). Bolstering the bearish bias is the shorter-term head-and-shoulders top (which comprises what may be the larger right shoulder), which is confirmed. Bears are favored against 1.6665.
Australian Dollar/US Dollar
The AUD/USD continues to work higher towards the 78.6% of the decline from .9856-.6007, which is .9032. This level intersects with a potential resistance line on September 24. Former support at .8951 is also a level to keep in mind. Momentum indicators are divergent (not shown). The message is the same here as for the EUR/USD: The risk of a reversal is high and increases with each tick higher in price.
NEXT: US Dollar Versus Kiwi, Yen, Loonie, and More |pagebreak|
New Zealand Dollar/US Dollar
A NZD/USD objective is .7250. This is where the rally from .6193 would be equal to 61.8% of the .4890-.6601 rally. The level also rests in between two prominent former pivots (.7222 and .7384). Weakness near there would warrant a closer look. Divergence with DDiff (derived from DMI) warns of a reversal.
US Dollar/Japanese Yen
Keep the long-term outlook in perspective. "A fourth triangle ended in 2007 above 124.00, therefore, the decline from that level is viewed as a fifth wave that will not be considered complete until price drops to an all-time low (below the 1995 low near 80)." At this point, former support in the 91.73/94 zone is potential resistance.
US Dollar/Canadian Dollar
Barring a break above the resistance line, the USD/CAD is vulnerable to a drop towards 1.0330, which has been both support and resistance over the last several years. This level is also the 61.8% extension of the 1.3068-1.0782 decline (from 1.1730).
US Dollar/Swiss Franc
"The print below 1.0367 (December 2008 low) satisfies the minimum requirement for wave v of C." An objective is 1.0037 (100% extension). Trading above channel resistance would indicate with a high probability that a low is in place.
By Jamie Saettele of DailyFX.com
Related Articles on FOREX
The barometer of risk-on and off has usually been the Japanese yen (JPY) but today, the break of 1.1...
The euro (EUR) and USD may be the headlines but the breakout for diving in risk naked is probably eu...
The bid to the USD means trouble for risk even as equities hold big gains from Asia and Europe follo...