US Dollar Enters Buy Zone against Canadian Dollar

• EURUSD resistance clusters around 1.3745
• GBPUSD at multiyear highs; 1.6600/50 is support
• USDJPY bearish engulfing pattern

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EUR/USD

Weekly

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-EURUSD remains capped by the trendline that connects the 2008 and 2011 highs (exceeding that level could trigger a breakout). The break below the trendline that extends off of the September and November lows increases the probability that the late December high is significant. The underside of that line crosses 1.3730 on Monday and 1.3754 on Friday.

-The rally from the February low would consist of 2 equal legs at 1.3768.

-The late December failure also raises the possibility of a double top with the October and December highs. The pattern would trigger below 1.3294 and yield a 1.2757 objective. This level is in in line with the 2013 low.

GBP/USD

Weekly

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-GBPUSD found support last week from former resistance levels; specifically the October high and top side of the line that extends off of the 2009 and 2011 highs.

-The move to new highs opens up the November 2009 high at 1.6877 then the 2005 low and 2009 high at 1.7042/46. The measured objective from this year’s 1.6667-1.6251 range rests at 1.7083.

-1.6600/50 is support for longs.

AUD/USD

Weekly

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-The next major target in AUDUSD is .7937. This target is determined by the .8847-.9757 range (.8847 – (.9757-.8847). Interestingly, the 50% retracement of the decline from the 2001 low registers at .7927. ‘Chartwise’, the 2010 low is at .8067.

-The largest advance since the October top is underway. The advance is impulsive (5 waves). The implications are for a pullback into .8820/30 (but maybe not before a run on .9085) before another rally attempt towards .9166-.9267. The trendline that extends off of the April and October highs crosses .9166 in mid-March.

NZD/USD

Weekly

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-NZDUSD is testing a trendline confluence defined by the line that extends off of the October and January highs as well as the underside of the line that extends off of the August and November lows.

The level is reinforced by the 1/14 close (high day YTD). In other words, this is a great place for a reaction.

USD/JPY

Weekly

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-USDJPY finishes the week right below the trendline that connects the lows from November 2012 and October 2013. Of note as well is a bearish engulfing pattern. In FX, real engulfing patterns can only occur on a weekly (or monthly) time frame since a gap is required. A bearish engulfing pattern requires a gap higher and close below prior period’s open. Only the bodies of the candle are considered.

-Longer term, there is an Elliott case to be made for a return to the 4thwave of one less degree. The range spans 93.78 to 96.55.

USD/CAD

Weekly

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-Measured objectives from the breakout above the 2011 high range from 1.1680 to 1.1910. The Jul 2009 high rests in this zone at 1.1724 and the 2007 high is near the top of the zone at 1.1875.

-From an Elliott perspective, it’s possible that the rally from the 2012 low composes a ‘3rd of a 3rd (or C)’ wave from the 2007 low.

-The close above the line that extends off of the 2002 and 2009 highs as well as the close above corrective channel resistance add credence to the 3rd of a 3rd wave position.

-USDCAD is at support now.

USD/CHF

Weekly

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-The USDCHF may have completed a corrective decline from the 2012 high in late December. The decline is in 3 waves, channels in a corrective manner (connect the origin of waves A and C and project a parallel from the terminus of wave A to project the terminus of wave C), and consists of 2 equal waves (would be exactly equal at .8888…the lowest weekly close was actually .8885).

-The break above the trendline that originates at the July high adds credence to a larger trend change but the rate remains capped by the June and August lows. The market must stay above the December low in order to maintain a constructive longer term bias.