Euro Risk For Short Term Bulls at 1.5611

[DailyFx]

Risk on EURUSD longs can be moved to 1.5611 (for short term traders) and 1.9648 on GBPUSD. The AUDUSD has rallied as expected and risk there can be moved to .9475 (roughly breakeven).









We’ve altered the count slightly but the implications are the same. We are treating the consolidation from 1.6018 as a triangle (wave E completed at 1.5468 on 6/23). Treating this count as preferred clears up recent price action. The rally from 1.5468 is a clean ‘5 up’ and the drop from 1.5909 ended near the 61.8% of 1.5468-1.5909 (wave 2 traveling 61.8% of wave 1 is common). Our position is that wave 3 is headed higher towards 1.6324 (161.8% extension of 1.5469-1.5909/1.5611) while 1.5611 remains intact.



Visit our recently updated Euro Currency Room for specific resources geared towards this currency.



STRATEGY: Bullish, against 1.5611, target is above 1.6018 (near 1.63)


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There are 3 waves up from 95.72 so a top may be in place at 108.57. Wave C (what we are treating as wave C at least) from 102.58 is 61.8% of wave A (95.72-105.70). The next level of potential resistance is the 100% extension at 112.62. A cautious bearish bias is warranted against that level. Also, the 200 day SMA is acting as resistance and has since early June.



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A C wave (of either a triangle or flat) is underway (although there is the slight possibility that wave C of the triangle is complete at 2.0006…see red labels). If a triangle, wave C likely continues until 2.02 (March 27 top). If a flat, wave C will continue through 2.04. If wave C of the triangle is complete at 2.0006, then the drop from there is wave D and could come under 1.9648. Longer term traders should hold GBPUSD as long as price is above 1.9409 since wave E would lead to a rally anyway.



Visit our recently updated British Pound Currency Room for specific resources geared towards this currency.



STRATEGY: Bullish, against 1.9648, target 1 at 2.0175, target 2 TBD




We maintain a bearish USDCHF bias due to the structure of the advance from .9647, which is in 3 waves and therefore corrective. 3 wave movements are eventually completely retraced. A bearish bias is warranted against 1.0540. 1.0375 is the 61.8% of 1.0540-1.0110 and could provide resistance near term.




Bottom line is that we remain bullish as long as price is above 1.0047. With price above there, we maintain that a triangle is complete. Some doubt has entered out mind regarding this count simply because the USDCAD has not yet accelerated higher in a 3rd wave.



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STRATEGY: Bullish, against .1.0047, target above 1.0324




We wrote yesterday that “the AUDUSD drop from .9668 appears complete as a second wave correction. Specifically, the drop from .9650 is in 5 waves, making it likely that wave c of the correction is complete. A bullish bias is warranted against .9328, although price ideally remains above .9475. We’ll look to move the stop to this level soon.” Risk can be moved to .9475 now as the AUDUSD has accelerated higher. Ultimately, we expect a blow-off top to end near parity (1.00).



STRATEGY: Bullish, against .9475, target above .9668 (probably near 1)




Recent commentary has mentioned that “an A-B-C correction may be complete at .7662 but our preferred count is for a rally to end closer to the 50% of .7921-.7445 at .7683 and perhaps even the 61.8%-78.6% at .7740-.7920. A rally to there would fill the 6/4 gap.” A C wave is likely underway now from .7483. A bullish bias is warranted against .7445.



STRATEGY: Bullish, against .7445, target .7720



Tell us what you think about this report: contact the strategist about the article at jsaettele@dailyfx.com