Euro/Dollar Approaches Large Resistance Zone

The EURUSD is approaching the Fibonacci retracement zone of the decline from 1.6040-1.3877. The 38.2% is at 1.4667 and the 50% at 1.4919.

EUR/USD

The EURUSD is approaching the Fibonacci retracement zone of the decline from 1.6040-1.3877. The 38.2% is at 1.4667 and the 50% at 1.4919. This area is also a former congestion zone. The bias remains bullish but expect resistance in this area this week.

USD/JPY

My focus remains on the longer term picture and the advance from 95.72, which is corrective (3 waves). On Friday, I mentioned that "resistance may be strong at the current level (108), which is the September 12 high." That level was also the 61.8% of the decline from 110.71. The bias is bearish against 107.46.

GBP/USD

On Friday I wrote that "a push into the former congestion zone of 1.8510-1.88 is likely next week." The 50% of the decline to 1.7443 is at 1.8647 and in the center of this zone. Expect resistance near there.

USD/CHF

The USDCHF is not nearly as clear as the EURUSD or GBPUSD. The pair pushed through its 9/15 high and failed to hold below its short term trendline (although the advance may very well be an X wave in a larger complex correction). A drop below 1.09 would favor the labeling of the X wave.

USD/CAD

I wrote last week to "expect a break below 1.0566 soon and much lower prices going forward. The USDCAD should remain below 1.0731." The pair has broken to the downside and is not below 1.04. Rallies should prove countertrend and significant support in not until near 1.00. Price should remain below 1.0674.

AUD/USD

The AUDUSD continues to advance and a return to .8750/.88 is still expected over the next several weeks. The advance from .7799 is impulsive and probably wave A of an A-B-C zigzag. A wave B decline should begin soon and bring price back to at least .8280 before strength resumes.

NZD/USD

To repeat what I have said over the past week…"A countertrend move back to the .7200 area or higher is probably underway. This level intersects with the underside of a former support line that was broken in August." Expect resistance near .70. The NZDUSD may be nearing the end of a 3 wave movement from the low. While this could be the first leg in a triangle or flat, risk is quickly shifting to the downside.

DailyFX

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