Forex Technicals: The Day Ahead, September 24

Dollar Strength should prove corrective and there are Well defined dollar resistance levels across the board (except USDCHF).

EURUSD

A small 4th wave may be unfolding. As long as price is above 1.4546, expect a push into 1.49 in order to complete 5 waves from 1.4071. Coming under 1.4546 (and/or the Elliott channel line) would potentially trigger the alternate bearish count. I presented that count today in the Elliott Wave forum.

USDJPY

The bearish level in the sand now is 106.90. Staying below there keeps the short term trend down potential for the decline to accelerate in a 3rd of a 3rd that will eventually break below 103.52 (and much lower).

GBPUSD

Cable is in the same position as the EURUSD (but less volatile). A small 4th wave is probably underway. Watch the Elliott channel line for support as well as 1.8361. The short term bullish trend is considered intact as long as price is above 1.8281.

USDCHF

Is a bottom in place for the USDCHF? The decline from 1.1284 traveled a bit further than the 1.1422-1.0897 decline. Equality among wave distance is common in corrections. However, this scenario does not fit with the EURUSD and GBPUSD, which have a good chance of working higher before rolling over. Clarity is lacking with the USDCHF.

USDCAD

The USDCAD bounce from 1.03 may be a small 4th wave within the impulsive drop from 1.0827. Tracing out this 4th and then a 5th wave would confirm my longer term bearish stance. Expect resistance near 1.05 (38.2% Fibo is at 1.0493 and former 4th wave is at 1.0519).

AUDUSD

I wrote yesterday that '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 .8266 before strength resumes.' The AUDUSD returned to .8266 today but there is no evidence that the B wave decline is over. Continued weakness should find support in the Fibonacci zone (.8247-.8076).

NZSDUSD

To repeat from yesterday…'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.' It is possible that the NZDUSD turns up from here to complete a ‘5’ (5 waves) from .6435 but the position of the AUDUSD suggests that the small B wave corrections are already underway. As such, expect weakness to at least .6635.

DailyFX

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