Dollar and Yen Surge

The US dollar and Yen surged today. Expect the Yen to continue its asecnt, as the USDJPY target is not until below 95.71.

EUR/USD

The decline from 1.4871 is an impulse (5 waves) and indicates that a short term low likely forms soon. The ensuing advance should prove corrective. Potential resistance begins at 1.3911.

USD/JPY

Recent commentary was “I favor the downside as long as price is below the trendline from the 110.71 top. The 200 day SMA is sloping down (barely) and right at current price. Whichever way this break goes; it should be violent.” The USDJPY broke below 103.50 today and the decline should continue. 103.77 may provide short term resistance if needed.

GBP/USD

Cable has yet to break its low. “The continued decline in Cable makes the decline from 1.8675 in 7 waves, which is a double zigzag correction. The GBPUSD is in the exact same position as the EURUSD; a flat or triangle is probably underway. Nothing is ever certain, but the weight of evidence suggests to me that a larger correction of the decline from mid July is more likely than a bearish break here. Evidence includes RSI (on this chart), and COT data.

USD/CHF

The USDCHF exceeded 1.1422. The advance is in 5 waves (as is the EURUSD decline from 1.4871) so a 3 wave correction is expected. Initial support is at 1.1215.

USD/CAD

The USDCAD exceeded 1.0827, so the bearish outlook is negated. The advance from 1.03 is in 5 waves so we should see a corrective decline begin soon. If it does, then we'll look to identify a bottom. Support begins at 1.0830.

AUD/USD

The AUDUSD is in free fall. Based upon wave structure, the free fall may continue. .7822 may be the top of a small second wave. As long as price is below there, expectations are for the decline to continue until chart support at .7012 and a Fibonacci extension at .6467.

NZD/USD

The drop below .6435 confirms that wave 5 (within the 5 wave drop from .8219) is underway. The minimum objective is below .5927.

DailyFX

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