To review, USDOLLAR dropped in 5 waves from the March high. The 4/14 low was right on the 61.8% retrace of the rally from the March low. At that point, I was looking for a 3 wave rally back to 12692. Instead, USDOLLAR has traded in a tight range. Price is nearing the 4/14 low. It’s not impossible that the rally into the 4/21 high at 12593 is the entire correction but the correction would be awfully small in both time and price retracement. So, it’s possible that a flat is unfolding. Under this scenario, a C wave rally (probably sharp) will begin from nearby levels (may or may not take out the 4/14 first).
GBPUSD is the clearest USD pair from a pattern perspective in my opinion at the moment (followed by AUDUSD). Price hit resistance today. My view is that today’s high completes wave B and that wave C is underway. A possible C wave target is where waves A and C would equal other at 1.2118. Proposed resistance is now 1.2480.
4/27 – To summarize, the GBPUSD rally from the March low is impulsive. My best near term guess is that the decline from 4/14 is an A wave and that the rally from 4/21 is a B wave. Proposed resistance for wave B is the underside of the parallel that was support on 4/6 for wave 4. This line intersects the 4/17 high at 1.2522 tomorrow.
USDMXN has been trading around long term channel resistance for the last 7 weeks. Given the channel, I lean towards this being a consolidation top. A break below the line off of the 3/26 and 4/12 lows would be the signal for me to short (see 4 hour chart below).
NZDUSD is still not confirming the high in AUDUSD. A number of non-confirmations are highlighted on the chart over the last year+. Recall that the AUDUSD proposed resistance zone is .6523/44. High today was .6514 so we’re close. CPI tonight in Australia could trigger a spike and reversal to short. Bottom line, I’m still stalking AUDUSD on the short side.
EUR / commodity FX is interesting for a reversal higher. EURNZD is sitting on the center line from the channel off of the 2015 low. The center line has been precise resistance and support since August. Price also gapped through the center line in March (close up view is below). Gaps through levels reinforce the level in question as important. I am looking for a turn higher.
Recent EURAUD weakness is confined to a wedge. The bottom of the wedge is about 1.6450. This is just under the 200 day average, which is currently 1.6520 (see below). Strength above the wedge resistance line near 1.7000 would warrant a bullish stance. So, watch for support in the 1.6450-1.6520 zone but the real setup here is to get bullish above 1.7000.