EUR/USD – The 5th wave of the 5 wave bearish sequence from 1.3367 is in progress and should take price below 1.2865.  The 161.8% extension of 1.3367 – 1.3051 / 1.3296 is a bearish target at 1.2787.  This potential support is reinforced by the 11/17 low at 1.2761 and the 200 day SMA at 1.2799.  What could follow then is a 3 wave corrective rally with initial resistance at the 1/23 high at 1.3043.  Short term resistance is at 1.2948.  Price below there keeps the short term bearish structure intact.     

USD/JPY – We still maintain our position regarding the longer term implications from the 13 month inverse head and shoulders pattern.  A long term measured objective is at 128.67 – which is where the advance from 108.96 would equal the advance from 101.67 to 121.38.  The sharp rally from 120.19 (yesterday’s low) brings in to focus the 121.78 high.  A break above there exposes the aforementioned bullish targets.  120.19 is critical to the bullish case but 121.26 is short term support. 

GBP/USD – We continue to favor the topping out scenario.  Based upon our interpretation of the wave structure and various Fibonacci relationships, Cable is not as close to support (a potential near term bottom) as the EURUSD.  A small 5 wave decline from 1.9915 followed by a correction to 1.9733 places current price is a 3rd or C wave.  These are often powerful moves and estimated support is not until where the decline from 1.9733 equals the 1.9915 to 1.9644 decline.  This is at 1.9462, which is very close to the 1/9 high at 1.9455.  1.9644 is near term resistance and the bearish scenario is best served by price staying below 1.9733. 

USD/CHF – The USDCHF rally to above 1.2546 confirms that the decline to 1.2375 on 1/23 was the bottom of a corrective wave 4.  The next bullish target remains the 1.618 extension of 1.2271 – 1.1878 / 1.2110 at 1.2746.  1.2497 is initial support and price above there warrants an aggressive bullish stance.  A dip below 1.2497 does not destroy the larger bullish structure but does merit a more cautious approach (technically…there are 5 waves up from 1.1878 but we think that this current 5th wave could extend to the mentioned measured objective of 1.2746).  Only a decline below 1.2375 negates the bullish wave implications.  

USD/CAD – The USDCAD is very close to our measured objectives.  The 1.618% extension of 1.0927-1.1456 / 1.1028 is at 1.1883.  1.1883 is an ideal topping area for the USDCAD before the pair resumes its longer term downtrend to below 1.0927.  The potential 2+ year bearish channel reinforces resistance at the current juncture.  The topping scenario is best served by one more rally to above 1.1850 in order to complete 5 small waves from 1.1644.  A decline below 1.1644 suggests that the decline has already started.

AUD/USD – The AUDUSD broke below the neckline of the head and shoulders pattern, therefore completing the pattern and conforming the bearish structure.  The 1/10 low at .7759 is the breakdown point and now resistance.  Focus is now on the 11/13 low at .7614.  There is still the possibility that this decline from .7936 is the C wave of a an A-B-C correction from .7979.  In this case, .7714 would be where the A and C waves would be equal.  A daily close above .7759 would give the latter scenario more weight. 

NZD/USD – The 7-month trendline is the pivot in Kiwi.  That line is at .6900 today and increases 7 pips per day.  We have focused on two scenarios over the past week.  The first is that the rally from .6840 had traced out an a-b-c correction at .7034, which should then give way to weakness.  The other possibility was that the rally from .6840 was a combination of 1st and 2nd waves.  As long as .7096 holds as resistance, the former interpretation remains valid.  Price is currently slipping below the 20 day SMA (which is turning over itself), which lends confidence to a bearish bias.     

Jamie Saettele is a Technical Currency Analyst for FXCM.