- EURGBP breaking higher from bullish base - EURCHF triangle - EURCAD testing resistance from trendline and Fibonacci - EURAUD and EURNZD should work higher for at least a few weeks Recent commentary was that “the EURGBP may have completed a correction from the December 2008 top. The structure of the decline since then is not especially clear, which is the first sign that the pair in question is stuck in some sort of correction. If the interpretation of the wave count above is correct, then the EURGBP should retrace most of its decline. Today’s outside bullish day is a good start.” Since that outside bullish day, the EURGBP has traded higher, reaching its highest level since June 9th today. Favor the upside against .8511. There is potential resistance from the 200 day SMA at 87.50. Since the October 2008 low, the EURCHF has traded in a contracting range that will probably end up as a triangle. Triangles are continuation patterns and the prior trend was down, so expect a break lower eventually. It is possible that the rally to 1.5387 completed wave e of the triangle. Coming under 1.5000 would reinforce this view. The decline from 1.7522 can be counted a number of ways - either a series of first and second waves in a larger decline or an a-b-c correction that is complete. The structure of the rally from 1.5342 will indicate which count is more probable. As of now, the rally can be classified as corrective (3 waves). However, if wave iv and v develop, then the bearish 1-2 count is negated. The pair is currently testing resistance from the confluence of a trendline and the 61.8% of the decline from 1.6983. It is possible that a multi decade top is in place for the EURAUD at 2.1174 (October 2008 high) but a strong advance, even if just countertrend could bring price back to 1.8660 (decline from there is choppy and could be a diagonal).
A EURUSD trade is setting up for bears.? The rally from 1.3876 was in 3 waves (corrective) and may have actually completed a complex correction from 1.3925.? The decline from 1.4057 is impulsive, which suggests that the larger trend is down.? Expect a recovery during the Asian session in order to correct the 5 wave decline.? Initial resistance is 1.3962.? 1.4000 is the 61.8% of the decline from 1.4057.? In summary, expect a recovery back to 1.3960-1.4000 prior to resumption of the larger downtrend.
The AUDUSD and NZDUSD present the clearest patterns. Both pairs have declined in 5 waves and rallied in 3 from their June 30th highs. The implications are US dollar bullish. Euro / US Dollar A triangle remains possible from above 1.4300, as does a flat (price would come under 1.3750). It is also possible that a significant top is in place above 1.4300.? Near term structure is bearish against 1.4203.? Short term Fibonacci resistance is at 1.4100. British Pound / US Dollar The drop below 1.6231 favors additional weakness below 1.5800. The rally from 1.5800 counts best as a 3 wave rally and 3 wave rallies occur in B or X wave positions, diagonals, and triangles. All of these are possible right now. The B or X wave interpretation seems most probable given the bearish EURUSD implications. Australian Dollar / US Dollar I wrote yesterday that “the decline from .8162 is an impulse (5 waves), which suggests that the larger decline has turned down.” As expected, a 3 wave advance has succeeded the 5 wave decline from .8162. Fibonacci resistance extends to .8050. A top and reversal is expected before .8162.
The COT Index is the percentile of the difference between net speculative positioning and net commercial positioning measured over a specific number of weeks (either 52 or 13).? A reading close to 0 suggests that a bottom is forming and a reading close to 100 suggests that a top is forming.? The readings are for the actual currency, not the currency pair.? For example, a reading of 100 on the Canadian Dollar suggests that the Canadian Dollar is close to a top (USDCAD close to a bottom). ??? Readings of 95 and higher as well as 5 and lower are in boldfaced red type to indicate potential market extremes.? For example, an increasing index is bullish until the index is extreme (near 100), at which time the risk of a reversal or pause in the trend increases.???? ? US Dollar US Dollar Index: The 13 week index has increased from 0, which indicates a bearish sentiment extreme.? Sentiment extremes occur near bottoms so expect a bottom and reversal in the USD. Implications: bottoming ? Euro EUR : The 13 week index has rolled over from 100, which indicates a turn from a sentiment extreme.? Tops tend to occur in close proximity to readings of 100.
Written by Andrew Spanton, GlobalFXRadio
Forex Wrapup 07.06.09
Once again, we are starting the week with the sense that risk appetite could face a momentous shift; yet once again, the elements for a breakout are already falling apart. In the meantime, we have seen many pairs produce false breakouts (EURJPY for example) to invalidate clear range scenarios. Why Would GBPAUD Hold a Range
Notice to FXCM LLC (FXCM U.S.) Traders: How to use Stops and Limits after July 31 For Immediate Release: Media Contact: Jaclyn Sales, jsales@fxcm.com New York July 6, 2009 FXCM Holdings , has received numerous questions after our first e-mail regarding the new NFA Compliance Rule 2-43(b). Please note that you will be able to use entry orders to place stops and limits after July 31, 2009. Entry orders provide the ability to realize profits and cut losses.
Euro price action remains choppy; 100-Week SMA key
Dollar/Yen eyes retest of critical trend lows
Cable bearish reversal week could open deeper setbacks
Dollar/Swiss carving out meaningful base
Dollar/Cad gains seen extending to previous support turned resistance
Australian Dollar stalling by longer-term moving average
New Zealand Dollar supported by 10-Week SMA for now
EUR/USD – The market remains locked in a multi-day [...]
Written by Terri Belkas, Currency Strategist
The British pound and commodity dollars all face high event risk from rate decisions by the Bank of England and Reserve Bank of Australian, along with Canadian employment and business activity reports. The US dollar could also feel the impact of the ISM non-manufacturing index, but ultimately, risk trends remain [...]
Trading the News: Reserve Bank of Australia Interest Rate Decision What’s Expected Time of release:?? ??? ? 07/07/2009 04:30 GMT, 00:30 EST Primary Pair Impact :?? ? AUDUSD Expected: ?? ??? ?3.00%??? Previous: ?? ??? ?3.00% Impact the RBA Rate Decision had on AUDUSD over the last 2 months mont hs ? Period Data Released Estimate Actual Pips Change (1 Hour post event ) Pips Change (End of Day post event) June 2009 06/02/2009 09:00 GMT 3.00% 3.00% +10 +116 May 2009 05/05/2009 09:00 GMT 3.00% 3.00% –4 +17 June 2009 RBA Rate Decision The Reserve Bank of Australia kept the benchmark interest unchanged at 3.00% for the second consecutive month in June, but continued to hold a dovish outlook for future policy as price growth falters. The RBA minutes said that the current policy in place ‘would be consistent with fostering sustainable growth and low inflation,’ but continued to see scope for ‘some further easing’ as the outlook for global growth remains weak