Australian Dollar and Kiwi Bullish Setups

Daily Forex Technicals | Written by DailyFX | Nov 04 08 14:51 GMT |

Patterns in the AUD/USD and NZD/USD suggest that large rallies are underway. The EUR/USD is not as clear, although holding last week's low is bullish as well. EUR/USD The decline from 1.6040 is counted as either an A-B-C drop or waves 1 through 3 within a 5 wave decline. In the case of the former, price will remain above 1.2327 in its way above 1.3302. Support is at 1.26. In the latter scenario, the EURUSD will probably range and complete a triangle as a 4th wave before dropping to a new low. Although the longer term trend is likely down, there will be a bullish opportunity in the EURUSD in the next week or so…either after completion of a 5 wave decline or confirmation that the decline from 1.6040 was in 3 waves. USD/JPY The USDJPY rally from 90.86 has broken through a short term resistance line. 5 waves should complete near 102 before a pullback into congestion near 98. GBP/USD The GBPUSD is supported by a long term trendline that dates to 1985 (see purple line at bottom of chart). I expect a larger bounce off of this line, regardless of the larger trend. Measured support from the 100% of 2.1166-1.7443/1.8675 reinforces the long term trendline. Similar to the EURUSD, a triangle could unfold (in which case the GBPUSD would remain below 1.6679) before a drop to a new low a larger recovery. USD/CHF The USDCHF is testing a resistance line from late 2005. This line combined with overbought and divergent RSI on the weekly should lead to a drop that lasts at least a number of weeks. USD/CAD Price has come into a support zone defined by former support at 1.13 and 1.1740. 1.13 is the 4th wave of one less degree and should provide strong support. AUD/USD The rally from .6005 is either wave a or i in a larger rally. Wave b or ii is considered complete at .6544. Wave c or iii is underway now and an initial target is .7515 (100% extension). .8156/85, the 161.8% extension and the 61.8% of the entire drop from .9856, is a multi-week target. NZD/USD Kiwi is in a similar position. The rally to .6037 is either wave a or i within a larger rally sequence. Wave b or ii is complete at .5742. Targets from Fibonacci extensions and retracements are at .6484 and .6990. 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.