Euro / Dollar Noisy Range Continues

• EURUSD support at 1.2880-1.2910
• USDJPY in center of 2 month range
• GBPUSD rolls over ahead of 1.50
• USDCHF completing short term diagonal

EUR/USD

The EURUSD is in a correction that is working higher from 1.2704. Corrections are choppy and prone to false breaks, especially the early stages. Still, a rally to Fibonacci resistance, which does not begin until 1.3440, is expected over the course of the next several weeks. 1.2704 needs to remain intact to keep this forecast on track. Short term support is at 1.2883.

USD/JPY

The USDJPY is at the center of its 87.10-94.67 range. Former resistance just below 91 now serves as potential support. It is likely that either a triangle or a flat is unfolding from the December low at 87.09. I say this because both the advance from 87.09 and decline from 94.67 are in 3 waves. The subwaves of triangles and flats are 3 wave affairs.

GBP/USD

The rally from 1.35 in the GBPUSD is in 3 waves to this point and the 2 bull legs are nearly equal. The rally could be just a 3 wave corrective advance in the ongoing bear. The structure of the decline from 1.4990 should shed more light on the GBPUSD's future path. Fibonacci support is in the 1.44-1.4620 zone.

USD/CHF

The drop from 1.2303 is an impulse (5 waves), but the drop may be the end of a decline rather than the beginning (a C wave). The decline would have completed an expanded flat at 1.0367. This level serves as the secondary low in a longer term bull cycle from .9634. Still, weakness is expected near term to at least 1.1312. The 200 day SMA is just above 1.10. Over the next several days, the USDCHF may complete an ending diagonal from 1.1312 that will give way to weakness over the next several weeks.

USD/CAD

A triangle has been underway since October and serves as a 4th wave correction. The break from this triangle should be violent. Near term, I favor a drop below 1.2020 in order to complete wave e (triangles are labeled a-b-c-d-e). Aggressive traders may wish to trade the short side against the 1.2387 but the highest probability strategy is to wait for wave e to end before attempting a long position (maybe later this week or early next week) against 1.1459 for a move upwards of 1.40.

AUD/USD

The AUDUSD is most likely working higher in order to complete a flat above .7275. The process should take a few weeks to play out; probably the rest of the month. Short term support begins at .6616 and extends to .6472.

NZD/USD

There is a clear '5' down from the 2008 high and a corrective advance from the 2008 low to .6090. The decline from there is probably the first leg of the next bearish cycle. The count is similar to the EURUSD count in that the first wave of the next bear leg may be complete and a recovery is expected prior to resumption of the downtrend. The advance underway from .4958 may be wave a of an a-b-c advance that will end in the .5550-.5630 zone. Short term support begins at .5239.

DailyFX

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