By DailyFX - EUR/USD * The decline from 1.2976 is likely in a 4th wave consolidation, which means that immediate risk is to the downside back...

... towards today’s 1.2781 low of which a
break targets the 5/26 low of 1.2699 ( the 261.8% fibo extension of 1.2976-1.2885 is
at 1.2696). Positive divergence with RSI on the hourly preceded the recent bounce
from 1.2781 and additional gains target the 38.2% fibo of 1.2976-1.2781 at 1.2855.
Current price is resisted by the 20 day SMA at 1.2821. Daily oscillators favor
shorts with MACD slope and CCI both negative and declining.

USD/JPY * USD/JPY has blasted through its 10 and 20 day SMA’s, trading to the upper
Bollinger band on the daily. Hourly oscillators are declining from overbought
levels but weakness at this point looks corrective while gains appear impulsive.
Support is at today’s low of 112.89. Strength past yesterday’s 113.56 high exposes
the 50% fibo of 118.87-108.96 at 113.91 and then the 61.8% fibo at 115.07. A rally
to 115.07 could mark the end of the larger correction on the daily and lead to the
next leg of the downtrend in USD/JPY.

GBP/USD * The decline from 1.8879 found support just above the 5/26 low at 1.8529.
Like EUR/USD, RSI on the hourly is rising from below 30 and gives scope to some
gains going forward, perhaps to the 38.2% fibo of 1.8879-1.8548 at 1.8674 but it
appears as if we are in a larger 3rd wave decline of the correction from 1.9025.
This calls for additional weakness past 1.8529, with the confluence of the 5/4 low /
38.2% fibo of 1.7227-1.9025 at 1.8334/39 as the next significant area of support.

USD/CHF * USD/CHF has rallied to and past the 10 day SMA of 1.2167 to just above the
psychological 1.2200 figure this evening. Overbought conditions on the hourly led
to a retreat back to the 10 day SMA and additional weakness targets the zone bound
by the 20 day SMA / 38.2% fibo of 1.2014-1.2207 at 1.2130/38. The hourly presents
two scenarios: one is that we already made a 5 wave rally that ended at 1.2206 and
the other is that we are about to enter the 5th wave rally and challenge the 6/1 and
5/26 highs at 1.2291/99. The latter seems more probable because the structure of
the overall correction of the downtrend to 1.1919 looks like a 3 wave zigzag (so
far) with the first wave ending at 1.2299 and the second at 1.2014. This makeup
places us in the 3rd wave * which could possibly challenge the 38.2% fibo of
1.3233-1.1919 at 1.2419 before the large correction on the daily chart is completed.


USD/CAD * USD/CAD has also rallied past its 10 and 20 day SMA’s. It appears as if
the recent retrace from 1.1171 is the early part of a correction that could lead to
a rally to the 138.2% and 161.8% fibos of 1.0927-1.1100 from 1.0972 at 1.1211 or
1.1251. Immediate price action could be down as short term (hourly) oscillators are
declining from overbought readings. Support is at the 38.2% fibo of 1.0972-1.1171
at 1.1095. The scenario that we described yesterday involving a head and shoulders
continuation pattern (leading to weakness) could still play out but rallies appear
far more impulsive than declines at this point.

AUD/USD * AUD/USD continues to plummet and currently trades at support defined by
the 50% fibo of .7014-.7791 at .7403. With yesterday’s 80 pip decline, the pair now
trades below the 200 day SMA, which is now resistance at .7461. Positive divergence
with oscillators on the hourly does point to some short term correction, potentially
towards the 38.2% fibo of .7545-.7390 at .7449 but daily oscillators are sloping
down and suggest continued weakness towards the 61.8% fibo of .7014-.7791 at .7312.


NZD/USD * Kiwi also continued to decline yesterday and found support at the
confluence of the 100 day SMA / 61.8% fibo of .6142-.6482 at .6252/64. A break
below today’s .6250 low exposes the 78.6% fibo at .6204. daily and hourly
oscillators are both bearish as daily CCI crossed below 0 yesterday and hourly RSI
continues to fluctuate below the midpoint of 50. Any strength contends with today’s
high at .6299.



Jamie Saettele
Technical Currency Analyst
Forex Capital Markets LLC
New York, NY 10005
Tel (212) 897-7660
Fax (212) 897-7669
Toll Free 888-503-6739
jsaettele@dailyfx.com