Forex Technicals: The Day Ahead, October 7
The US dollar is strong, but signs point to a short term top forming soon for the US dollar.
EURUSD
There is little change from this morning's technicals, in which I wrote that '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.' When the advance gets underway, expect strength until at least 1.3911. This is the 4th wave of one less degree.
USDJPY
The USDJPY finally broke lower. 100 is the next level that will be put to the test. Former support just shy of 103 (102.81 to be exact) is potential resistance as is the breakout level of 103.50.
GBPUSD
The GBPUSD decline from 1.8675 is now in 5 waves and price broke below the September low to confirm the longer term bear. An advance, although corrective, should begin soon. I am expecting the advance to reach at least the 1.7843-79 area.
USDCHF
The USDCHF exceeded 1.1422. The advance is in 5 waves (as is the EURUSD decline from 1.4871) so a 3 wave corrective decline is expected to begin soon. Initial support is at 1.1215.
USDCAD
The advance from 1.03 is in 5 waves so we should see a corrective decline begin soon in the USDCAD. Support begins at 1.0830, although a deeper decline is likely.
AUDUSD
In this morning's technicals, I wrote that '.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.' The AUDUSD has already reached the first objective. .7416-.7517 is a resistance zone going forward. This is former congestion and a Fibonacci level.
NZSDUSD
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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