Daily FX Research Team

Jamie Saettele
.
www.fxcm.com
sales@fxcm.com
DailyFX jsaettele@dailyfx.com
Senior Currency Strategist
1.212.897.7660
1.888.50. FOREX (36739)
British Pound Decline Accelerates; Focus is on Prior Low

LATEST TRADING VIDEO: playing the Yen range

-check out the NEW DailyFX pivot point table

BIAS MAY
05/13/2010 BIAS CHANGE OBJECTIVE
EURUSD BEAR 12750 12350
GBPUSD BEAR 14920 <14475
AUDUSD BEAR 9400 TBD
NZDUSD FLAT
USDJPY FLAT
USDCAD BULL 9925 TBD
USDCHF BULL 10920 >11250
GOLD BULL 1180 1400, 1600
CRUDE FLAT

Long Term Trends and Pivot Points (monthly data) (updated on first of the month)
TREND S3 S2 S1 PL PH R1 R2 R3
EURUSD DN 1.2464 1.2789 1.3041 1.3330 1.3403 1.3618 1.3943 1.4195
GBPUSD DN 1.4692 1.4908 1.5090 1.5289 1.5324 1.5488 1.5705 1.5887
AUDUSD UP 0.8870 0.9002 0.9122 0.9248 0.9261 0.9374 0.9507 0.9626
NZDUSD UP 0.6683 0.6824 0.7044 0.7145 0.7224 0.7405 0.7545 0.7765
USDJPY UP 88.85 90.22 92.03 93.18 93.62 95.21 96.58 98.39
USDCAD DN 0.9713 0.9821 0.9999 1.0072 1.0142 1.0285 1.0393 1.0571
USDCHF UP 1.0010 1.0222 1.0499 1.0679 1.0743 1.0988 1.1200 1.1477

Medium Term Trends and Pivot Points (weekly data) (updated every week)
TREND S3 S2 S1 PL PH R1 R2 R3
EURUSD DN 1.2894 1.3048 1.3214 1.3362 1.3375 1.3535 1.3689 1.3856
GBPUSD DN 1.4938 1.5064 1.5220 1.5332 1.5361 1.5502 1.5628 1.5784
AUDUSD DN 0.8996 0.9077 0.9177 0.9247 0.9267 0.9358 0.9438 0.9538
NZDUSD DN 0.6966 0.7009 0.7090 0.7114 0.7152 0.7214 0.7257 0.7338
USDJPY DN 89.53 90.56 92.26 92.96 93.62 94.99 96.02 97.72
USDCAD UP 0.9587 0.9758 0.9873 1.0016 1.0072 1.0159 1.0330 1.0445
USDCHF UP 1.0353 1.0477 1.0601 1.0726 1.0726 1.0850 1.0974 1.1098
 Euro / US Dollar
Daily Bars

Prepared by Jamie Saettele

There is no change to my outlook for additional EURUSD weakness over the next several weeks. However, there is
a change to the extent of the weakness. A new low would potentially complete 5 waves down from 13822, which in
turn would complete 5 waves down from 15150. There is a cluster of Fibonacci objectives in the mid 12300s, which
is also near the 2008 low (12327). Move risk to 12750. A move above there would suggest that a triangle is
unfolding and resistance would then be 12900.

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 British Pound / US Dollar
60 Minute Bars

Prepared by Jamie Saettele

The GBPUSD is weakening in what is probably a small 5th wave. I wrote yesterday that “a closer look at the short
term GBPUSD pattern suggests one more low (below 14473) is likely. Resistance is 15123 but a top may be in
place at 15060. A bearish bias is warranted against 15200 (low of wave 1) in anticipation of a drop to a new low.”
Risk can be moved to 14920.

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 Australian Dollar / US Dollar
Weekly Bars

Prepared by Jamie Saettele

No change: “I remain focused on the potential double top with the November 2009 high at 9400. The AUDUSD has
plunged below its year + channel and 13 week SMA and the next level of interest on the downside is the February
low at 8575. 9130 is resistance. If 8570 is broken, then the objective would be 7700, which is the July 2009 low as
well as where the decline from 8571 would equal the 9411-8571 decline (double top measuring technique).”

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 New Zealand Dollar / US Dollar
Weekly Bars

Prepared by Jamie Saettele

No change: “Since the October top at 7640, the NZDUSD has stair stepped lower. The structure of the decline at
this point is 3-3-5, which is the substructure of a flat. However, there are several variations that would allow for the
beginning of a larger decline. As long as price is below 7446, I lean towards a long term bearish position. Watch
the short term channel for a break.”

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 US Dollar / Japanese Yen
Weekly Bars

Prepared by Jamie Saettele

After last week’s extraordinary decline and bounce, I want to take a look at the weekly in order to gain perspective.
The decline from the 2007 high is viewed as a leading diagonal. Leading diagonals are often followed by sharp
second wave advances (sometimes as much as 78.6%). The 61.8% and 78.6% levels are 10915 and 11577. Trading
above 9500 would put the pair back on track towards those levels. HOWEVER, looking back nearly a decade, there
have only been 4 instances of a weekly range as large as last week’s range. In each case, a sharp retracement gave
way to yet additional weakness. As such, traders may want to think about shorting against the top of the range
(9500) for a drop down to 9080 (see yesterday’s video for more on the Yen crosses).
 US Dollar / Canadian Dollar
60 Minute Candles

Prepared by Jamie Saettele

The rally from 9928 to 10746 is left as a correction and the succeeding decline is unfolding as a correction as well.
Either a triangle or flat appears to be unfolding from the 9928 low. In the case of a triangle, the USDCAD would
probably reach 10500-10600. In the case of a flat, the pair would exceed 10750. The 78.6% retracement has held as
support.

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 US Dollar / Swiss Franc
240 Minute Bars

Prepared by Jamie Saettele

Like the EURUSD, I expect one more price extreme (in this case a high above 11250) in the USDCHF. Price
ideally remains above 10920.

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 Gold
Weekly Bars

Prepared by Jamie Saettele

If you were at the Las Vegas expo, then this Gold chart looks familiar. The next objective would be the
confluence of the long and short term resistance lines, at 1400 (mid June). There are 2 Fibonacci extensions
above 1600 as well. Move risk up to 1180.

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 Light Crude
Weekly Bars

Prepared by Jamie Saettele

The slightly upward sloping trend over the past 10 months may be a large distribution (topping) pattern. Crude
has dropped below its 13 week SMA and is now testing a support line (broken below today…intraweek). Of
note is that the rally/consolidation from the 2009 low consumed roughly twice the amount of time as the
preceding decline.

Jamie Saettele publishes Daily Technicals every weekday morning, COT analysis (published Friday
evenings), technical analysis of currency crosses on Monday, Wednesday, and Friday (Euro and Yen
crosses), and intraday trading strategy as market action dictates at the DailyFX Forum. He is the author of
Sentiment in the Forex Market. Follow his intraday market commentary and trades at DailyFX Forex
Stream. Send requests to receive his reports via email to jsaettele@dailyfx.com.

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