• EUR/USD has continued to trek lower over the past few sessions after it broke below the key 1.3085/90 level – Convergence of the 55-day sma, 78.6% retracement (2/16 low & 2/24 high) & top of the daily Ichimoku Cloud. Shortly thereafter the single currency broke below 1.3050/55, which saw the longer-term 50% retracement of the move higher from Jan. 13th to Feb. 24th and bottom of the daily Ichimoku Cloud. The follow through led to an attempt on 1.3000, but it has so far held up as today’s low came in around 1.3010. This level is of little technical significance, however the was rumored bids in size between 1.3000-25 earlier in the day which may have come into play. Should 1.3000 give way, all eyes will be on the February low around 1.2970/75. Meanwhile, what was prior support now becomes resistance – Thus, look for 1.3050/55 and 1.3085/90 to cap the upside in the short-term.
• USD/JPY has been on an absolute tear this week as last week’s close above the 100-week sma looks to have spurred on further technical buying. The 83.00 level was noted by many on the street to be a large barrier, but perhaps even more importantly U.S. yields (10’s) finally confirmed the USD/JPY move higher and currently trade around 2.268% (quite a move from 2.03% just 48-hours ago) . There’s little technically to prove resistive at present levels (83.70/75) until the psychological 85.00 level, then 38.2% retracement (using the April 2009 high & Oct. 2011 low) at 85.30/35 and lastly the 2011 high around 85.50/55.
• AUD/USD took out the noted 1.0475 level noted in Monday’s CHART TO WATCH and now looks poised to make a run at the 200-day sma and 38.2% retracement (using the Nov. 2011 low & Feb. 2012 high) around 1.0400/05. Furthermore, the 1.0400/20 zone is where you will also find my personal favorite daily 144 & 169 EMA’s, yet adding to this level of significance. While Monday’s Elliot Wave count has slightly changed, a break below 1.0375/80 is still needed to invalidate the count and alter my bias.
• USD/MXN after breaking below potential trendline support around 12.7500 late last week and then trading below the February low at 12.6115/20 earlier this week, the peso managed to bounce off the noted 61.8% retracement (using the May 2011 low & Nov. 2011 high) at 12.5600 highlighted last Thursday – See TECH TALK. Upon further scrutiny, this may have completed 5-waves lower from the Nov. 2011 high and daily RSI failed to confirm the lower low, thus creating a Bullish Divergence. Typically, Elliot Wave analysis would look for at least a 3-wave correction and there is potential that this may have completed an expanded flat (3-3-5), which would imply a significant move higher over the coming quarters (think 14+). Additionally, the 12.56-6400 zone sees the 55, 100 and 200-week SMA’s come together and this is something which is unlikely to crack on the first attempt.
• NZD/USD broke below the top of the daily Ichimoku Cloud and 55-day sma earlier today at 0.8185 and 0.8165 respectively. This led to a rather sharp decline, first just testing, but then later breaking below the prior march 2012 low around 0.8110. Currently, the Kiwi is sitting around 0.8085/90 which is of technical significance as it sees the 100-day sma and 38.2% retracement (using the Dec. 2011 low & Feb. 2012 high) converge, however a break below may see a straight shot towards 0.8000.
• U.S. 10-year yield soared higher today, as noted last night on Twitter “U.S. 10yr Yield has broken above the key 2.09/10% level. This could set the stage for much higher rates” – See CHART TO WATCH. Little did I know that rates would shoot higher as quickly as they have, breaking above the highlighted 2.16% & 2.17% levels as well as the 200-day sma in less than 24-hours with ease. Technically, the next levels to keep an eye on are: 2.39/40% (Double Bottom measured move objective), 2.42% (October 2011 high) and then the 38.2% retracement at 2.47% (using the Feb. 2011 high & Sept. 2011 low).
• USD/JPY has been on an absolute tear this week as last week’s close above the 100-week sma looks to have spurred on further technical buying. The 83.00 level was noted by many on the street to be a large barrier, but perhaps even more importantly U.S. yields (10’s) finally confirmed the USD/JPY move higher and currently trade around 2.268% (quite a move from 2.03% just 48-hours ago) . There’s little technically to prove resistive at present levels (83.70/75) until the psychological 85.00 level, then 38.2% retracement (using the April 2009 high & Oct. 2011 low) at 85.30/35 and lastly the 2011 high around 85.50/55.
• AUD/USD took out the noted 1.0475 level noted in Monday’s CHART TO WATCH and now looks poised to make a run at the 200-day sma and 38.2% retracement (using the Nov. 2011 low & Feb. 2012 high) around 1.0400/05. Furthermore, the 1.0400/20 zone is where you will also find my personal favorite daily 144 & 169 EMA’s, yet adding to this level of significance. While Monday’s Elliot Wave count has slightly changed, a break below 1.0375/80 is still needed to invalidate the count and alter my bias.
• USD/MXN after breaking below potential trendline support around 12.7500 late last week and then trading below the February low at 12.6115/20 earlier this week, the peso managed to bounce off the noted 61.8% retracement (using the May 2011 low & Nov. 2011 high) at 12.5600 highlighted last Thursday – See TECH TALK. Upon further scrutiny, this may have completed 5-waves lower from the Nov. 2011 high and daily RSI failed to confirm the lower low, thus creating a Bullish Divergence. Typically, Elliot Wave analysis would look for at least a 3-wave correction and there is potential that this may have completed an expanded flat (3-3-5), which would imply a significant move higher over the coming quarters (think 14+). Additionally, the 12.56-6400 zone sees the 55, 100 and 200-week SMA’s come together and this is something which is unlikely to crack on the first attempt.
• NZD/USD broke below the top of the daily Ichimoku Cloud and 55-day sma earlier today at 0.8185 and 0.8165 respectively. This led to a rather sharp decline, first just testing, but then later breaking below the prior march 2012 low around 0.8110. Currently, the Kiwi is sitting around 0.8085/90 which is of technical significance as it sees the 100-day sma and 38.2% retracement (using the Dec. 2011 low & Feb. 2012 high) converge, however a break below may see a straight shot towards 0.8000.
• U.S. 10-year yield soared higher today, as noted last night on Twitter “U.S. 10yr Yield has broken above the key 2.09/10% level. This could set the stage for much higher rates” – See CHART TO WATCH. Little did I know that rates would shoot higher as quickly as they have, breaking above the highlighted 2.16% & 2.17% levels as well as the 200-day sma in less than 24-hours with ease. Technically, the next levels to keep an eye on are: 2.39/40% (Double Bottom measured move objective), 2.42% (October 2011 high) and then the 38.2% retracement at 2.47% (using the Feb. 2011 high & Sept. 2011 low).