Let’s end the week with a daily view of the most heavily traded currency pair in the world. The EURUSD has bounced from the trendline that is drawn off of April and September lows (another potential channel line is the lower line, in blue). I do expect a break and sharp decline, as per the wave count, sentiment readings, and recent divergent/overbought momentum readings. I indicated yesterday that “my focus is on resistance in the No change from yesterday – “The decline from 1.7050 could be a series of 1st and 2nd waves, part of a leading diagonal, or a 3 wave correction. Price action since 1.6750 could also be in the mold of a triangle. There are many possible counts right now but most point lower with 1.6700 intact. Be particularly cautious here though as the GBPUSD rally has accelerated (albeit through a very short term resistance line) and 1.6700 is in imminent danger.”
Former supports are now resistance at 1.6484 and 1.6530. Strategy is to short on rallies to these levels. The decline from 1.7050 could be a series of 1st and 2nd waves, part of a leading diagonal, or a 3 wave correction. Price action since 1.6750 could also be in the mold of a triangle. There are many possible counts right now but most point lower with 1.6700 intact.
Former supports are now resistance at 1.6484 and 1.6530. Strategy is to short on rallies to these levels. The decline from 1.7050 could be a series of 1st and 2nd waves, part of a leading diagonal, or a 3 wave correction. Price action since 1.6750 could also be in the mold of a triangle. There are many possible counts right now but most point lower with 1.6700 intact.
Former supports are now resistance at 1.6391, 1.6484, and 1.6530. Strategy is to short on rallies to these levels. The decline from 1.7050 could be a series of 1st and 2nd waves, part of a leading diagonal, or a 3 wave correction. Price action since 1.6750 could also be in the mold of a triangle. There are many possible counts right now but most point lower with 1.6700 intact.
Yesterday, I wrote that “a rally above 1.6643 would complete 5 up from 1.6239 and shift risk lower towards 1.6500 (at least). 1.6715/50 is a resistance zone that I will sell into.” I later updated those levels to 1.6670-1.6750 at DailyFX Forex Stream. After trading to a high just below 1.6700 (the high was made close to the 61.8% extension of the 1.5707-1.6404 advance), Cable has plunged over 300 pips. Former supports are now resistance at 1.6484, 1.6530, and 1.6607. Next week’s strategy will probably focus on shorting on rallies. Short term support is 1.6300/20. There are a number of patterns that could be underway from 1.6750, which will be discussed in FX Technical Weekly (published later today).
The GBPUSD has returned to and exceeded the head and shoulders neckline that was broken in September. Resistance extends to a line extended from the August and September highs, which is at 1.6456 today (the line decreases 11 pips per day). The 61.8% of the decline from 1.6746 has held on a daily closing basis. Structurally, the decline from 1.7000 may be a series of 1st and 2nd waves.
The GBPUSD has returned to and exceeded the head and shoulders neckline that was broken in September. Resistance extends to a line extended from the August and September highs, which is at 1.6467 today and 1.6456 Monday. I wrote yesterday that “longer term traders should look to position short against 1.6746 in the coming days.” This remains the strategy so be sure to follow DailyFX Forex Stream for position updates.
The GBPUSD has returned to test the head and shoulders neckline that was broken in September. Resistance extends to a resistance line extended from the August and September highs, which is at 1.6478 today and decreases 22 pips per day. Longer term traders should look to position short against 1.6746 in the coming days. 1.6350 is potential resistance as well (61.8% of 1.6746-1.5707).
I wrote yesterday that “an objective remains 1.5300 (just above the 161.8% extension) but a corrective rally may delay a decline to that level. In any case, a bearish bias is warranted against the line extended from the September and October 8th highs.” The line has held thus far. An extension of weakness in a larger 3rd wave remains possible with price below 1.6125. Strategically, keep a small position on in the event of this occurrence. Potential short term supports are 1.5880, 1.5840, and 1.5825.
I wrote yesterday that “the decline may have completed 5 waves down from 1.6746. An objective remains 1.5300 (just above the 161.8% extension) but a corrective rally may delay a decline to that level. In any case, a bearish bias is warranted against the line extended from the September and October 8th highs.” 5 waves are visible from 1.6746 so the odds of a correction back to at least 1.6125 are increased. An extension of weakness in a larger 3rd wave remains possible with price below 1.6125. Strategically, keep a small position on in the event of this occurrence.
The GBPUSD has traded below its September low but the decline may have completed 5 waves down from 1.6746. An objective remains 1.5300 (just above the 161.8% extension) but a corrective rally may delay a decline to that level. In any case, a bearish bias is warranted against the line extended from the September and October 8th highs. This line is at 1.6060 today and decreases 41 pips per day. 1.5930 is potential short term resistance.
The line extended from the September 11, 15, and 23 highs defines the short term trend. This line is at 1.6105 today (just pips from the high). Continue to favor the downside against there as price action since the 9/28 low is viewed as a consolidation that will give way to additional weakness.
The trend remains down against 1.6130 and price action since the 9/28 low is viewed as a consolidation (perhaps a triangle). A resistance line is at 1.6105 tomorrow.
Former support has held as resistance (1.6111) and a near term target is 1.5290 (161.8% extension of 1.7050-1.6111). There is a potential resistance line at 1.6171 tomorrow.
Former support has held as resistance (1.6111) and a near term target is 1.5290 (161.8% extension of 1.7050-1.6111). There is a potential resistance line at 1.6171 tomorrow.
Former support held as resistance (1.6111) and a short term channel defines the trend for now. A near term target is 1.5290 (161.8% extension of 1.7050-1.6111). The trend is down below 1.6130. 1.5923 is potential resistance.
Former support held as resistance (1.6111) and a short term channel defines the trend for now. A near term target is 1.5290 (161.8% extension of 1.7050-1.6111). The trend is down below 1.6130.
Former support held as resistance (1.6111). I wrote yesterday to “watch for resistance at the top of a potential channel as well (drawn a line across recent lows and extend a parallel from the 9/23 high in order to construct this line).” That line held and the GBPUSD remains on a path lower.
Former support is now potential resistance in the 1.6110/65 zone (1.6050 is also potential resistance). Watch for resistance at the top of a potential channel as well (drawn a line across recent lows and extend a parallel from the 9/23 high in order to construct this line).
The GBPUSD nearly reached 1.5750 last night. Former support is now potential resistance at 1.5915, 1.5980, and 1.6020. An extended decline could reach 1.5284 (161.8% extension of 1.7047-1.6111).
