Canadian Dollar May Begin Strengthening (USDCAD Bearish)

The euro / dollar remains in a range. Until this range is broken, there is little confidence in USD direction. There are signs that the USDCAD is reversing from below 1.30. Bearish potential is 1.15.

EUR/USD

The euro / dollar could still drop below 1.2330 in order to complete a 5th wave within a 5 wave decline from 1.6040 as an ending diagonal (not likely at this point). It is just as probable however that the pair pushes through 1.3302 in a larger recovery from 1.2330. Fibonacci resistance would begin at 1.36. Bottom line; the EURUSD remains in a range and there is little confidence in direction until that range breaks. It is worth noting that the rally from 1.2420 to 1.3085 appears impulsive (5 waves), which would favor bulls. However, that rally could be wave c of a flat within an ending diagonal.

USD/JPY

Staying bearish the USDJPY has proved a wise decision although the decline over the last month has been choppy. Still, I maintain that the larger USDJPY trend is down so strength should be sold. However, it remains unclear whether or not the rally from 90.86 is complete. As long as price remains below 96 (below the resistance line from early October), bearish potential is significant.

GBP/USD

The rally from 1.4554 is probably wave 4 of (3) (within a 5 wave decline from 2.1160). Resistance does not begin until 1.60 and there is potential for a move back to 1.67 (38.2% Fibonacci and October 30 high). 1.4554 ideally holds going forward.

USD/CHF

Higher highs and higher lows since the March low favors bulls as does the break above a line from 2002. The pair may be in for a sizeable decline over the next several weeks as price has reversed from the top side of a channel. The low side of that channel should provide support in late December. Another line to watch for potential support is the one that connects from the September 22 and October 30 lows.

USD/CAD

The rally from just below 1.15 is in 5 waves and could be a truncated 5th wave. If so, then a correction back to at least 1.15 and possibly lower is underway now. The drop from 1.2993 to 1.2120 is in 5 waves, which is bearish. Price should remain below 1.2993.

AUD/USD

There remains potential for a large recovery back to the mid .70s given the 5 wave drop from the top (waves a and b of an a-b-c correction would be close to complete). Bulls may attempt to 'pick' this bottom given that the AUDUSD has held above the October low.

NZD/USD

There is quintuple divergence with RSI on the daily NZDUSD chart, which warns of a reversal. Last Friday's inside day reinforces the potential reversal to the upside. Staying above .5186 keeps the short term trend bullish.

DailyFX

Disclaimer

Investment in the currency exchange is highly speculative and should only be done with risk capital. Prices rise and fall and past performance is no assurance of future performance. This website is an information site only. Accordingly we make no warranties or guarantees in respect of the content. The publications herein do not take into account the investment objectives, financial situation or particular needs of any particular person. Investors should obtain individual financial advice based on their own particular circumstances before making an investment decision on the basis of the recommendations in this website. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. All intellectual property rights are the property of Daily FX. Daily FX and its affiliates, will not be held responsible for the reliability or accuracy of the information available on this site. The content herein is provided in good faith and believed to be accurate, however, there are no explicit or implicit warranties of accuracy or timeliness made by Daily FX or its affiliates. The reader agrees not to hold Daily FX or any of its affiliates liable for decisions that are based on information from this website. Daily FX highly recommends that before making a decision, the reader collects several opinions related to the decision and verifies facts from at least several independent sources.