Following is a selection of comments from analysts on important technical developments in the foreign exchange market:
EURO/US DOLLAR: "The EUR/USD rally from 1.2456 to 1.2938 is in a 5 wave bullish sequence and the subsequent decline to current levels is completing a third wave (of a correction labelled a-b-c).
This fits with the idea that the end of corrections tend to be violent affairs. Corrective wave c (beginning at 1.2874) would equal corrective wave a (1.2938-1.2723) at 1.2659. This is the ideal bottoming area for EURUSD and we'll look for a rally from there."
US DOLLAR/YEN: "USD/JPY is at a supporting trendline from 108.96 (5/17) but probability favours a break lower. The 108.96-117.88 rally (May to July) was in 5 waves and has been followed by 2 waves (one down to 113.95 and one up to 117.48).
The completion of the correction requires one more wave down to at least 113.95 and weakness in recent days may be the beginning of this move. 117.05 needs to hold as resistance in order for the bearish scenario to play out."
STERLING/US DOLLAR: "GBP/USD loss of 1.8775 paves the way for extended weakness towards 1.8618 1.8493, the 50% and 61.8% retracements of the 1.8090 to 1.9146 advance respectively. Adopt a near-term bearish stance beneath Thursday's 1.8872 high."
US DOLLAR/CANADIAN DOLLAR: "The recovery from August 31's 1.1029 low is encouraging for aspiring USD bulls against a backdrop of waning downside momentum, but a rebound beyond 1.1141, the peak from September 6 is required to alleviate downward pressure on 1.1029 as the bear trigger for Jun 12's low of 1.0958 and the May 31 multi-year trend base at 1.0929."
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