Dollar Rally Accelerates; Pairs Reach Important Levels

Daily Forex Technicals | Written by DailyFX | Oct 22 08 14:26 GMT |

The US dollar rally has accelerated (except against the Yen). The GBPUSD has has nearly reached the 61.8% retracement of its entire rally from 2001. The USDJPY could break below 95 soon. EUR/USD As mentioned the past 2 days, remaining below 1.3535 keeps the extremely bearish count on track. Fibonacci extensions place the target area for a 3rd of a 3rd wave down (within the 5 wave drop from 1.60+) at 1.1437-1.1764. I also mentioned though that “I am not confident in this ‘breakdown’ count.” So far, the EURUSD is breaking down and picking a bottom is not ideal. That said, there are now 2 equal legs down from 1.6040 and RSI is at 20 and divergent. An A-B-C decline could be close to complete. An intraday impulsive rally would warrant a bullish bias. Until then, bears are in control and the target area is the mentioned 1.1437-1.1764 zone. USD/JPY Continue to favor the downside as long as price is below 102.46. This keeps the longer term bearish count intact in which the USDJPY will accelerate lower and drop below 95.72. 100, which was intraday support, could now serve as resistance. GBP/USD The drop from 2.1166 has nearly retraced 61.8% of the entire rally from 1.3680. Weekly RSI is oversold and divergent, so be on the lookout for a reversal. USD/CHF The USDCHF has now traded through its resistance line that has held price since 2001. The next level of potential resistance is former support at 1.1877. Support is in the 1.14-1.15 zone. USD/CAD The USDCAD rally since mid September has been nothing short of unprecedented. In less than 5 weeks, the USDCAD has rallied over 2200 pips. This is reflected in the fact that weekly RSI is currently above 80, something that has not happened since late 2000. Former support turned resistance may serve as resistance near 1.27. AUD/USD A triangle appears to be unfolding in the AUDUSD. If so, then a small E wave would bring price back to .70 (approximately) before the pair drops to a new low NZD/USD The short term NZDUSD chart looks the same as the AUDUSD short term chart. A triangle appears to be unfolding. However, it is not clear where a triangle would fit within the larger pattern (shown above). My long standing target of below .5927 has already been registered, so a larger recovery could be underway. For now, it is best to stand aside with this pair. DailyFX Disclaimer Investment in the currency exchange is highly speculative and should only be done with risk capital. Prices rise and fall and past performance is no assurance of future performance. This website is an information site only. Accordingly we make no warranties or guarantees in respect of the content. The publications herein do not take into account the investment objectives, financial situation or particular needs of any particular person. Investors should obtain individual financial advice based on their own particular circumstances before making an investment decision on the basis of the recommendations in this website. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. All intellectual property rights are the property of Daily FX. Daily FX and its affiliates, will not be held responsible for the reliability or accuracy of the information available on this site. The content herein is provided in good faith and believed to be accurate, however, there are no explicit or implicit warranties of accuracy or timeliness made by Daily FX or its affiliates. The reader agrees not to hold Daily FX or any of its affiliates liable for decisions that are based on information from this website. Daily FX highly recommends that before making a decision, the reader collects several opinions related to the decision and verifies facts from at least several independent sources.