The GBPCHF remains entrenched in a 4th wave correction that will probably complete as a triangle. The rally from 1.9421 to 2.0963 is in 3 waves and would be wave A of the triangle. Wave B is underway now and will likely end near 1.95/97. In summary, expect the GBPCHF to range for the next few months. Beware though that we do expect a new low (below 1.9421) in a 5th wave (which could happen without a triangle unfolding).
We view the GBPCAD rally from 1.9011 to 2.0906 as the first wave (probably an A wave) in a bull cycle and the drop from 2.0906 as the second wave (probably a B wave) in that bull cycle. Whether the cycle proves to be 3 or 5 waves does not matter at this point. Both scenarios call for a rally through 2.0906 in the coming weeks and months. This bullish outlook remains intact as long as price is above 1.9287. Near term, a push through 2.0248 would complete 5 waves from 1.9287 and likely give way to a corrective decline.
The GBPAUD has bounced from just above the 2.00 figure AND today the GBPAUD is likely to close above a resisting trendline that has contained price since August 2007. We wrote last week to, “watch for a reversal”. The pair has reversed and this could be the beginning of a major reversal. Near term, there are 5 waves up from 2.0294 so we expect a decline to unfold in a corrective manner and end near 2.0500/50 (61.8% and former daily low).
We wrote last week that “the GBPNZD is setting up for a major bullish reversal. The February low made a double bottom with the December 2006 low just above 2.41. Since then, the GBPNZD has trading in a choppy range. Still, as long as price makes higher lows, then potential for a much larger bull move exists.” That move is underway as the GBPNZD is testing 2008 highs. Expect the new trend to continue.
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[B]TREND ANALYSIS[/B] is based on a rolling pivot model. LONG TERM TREND is determined by the last 3 months of price data (high, low, close). SHORT TERM TREND is determined by the last 4 weeks of price data (high, low, close). R3, R2, R1, PL, PH, S1, S2, and S3 are provided to aid in identifying entries and exits. These are objective measures and our subjective analysis (STRATEGY) may differ.
[B]SCHEDULE[/B]
Monday: EURGBP, EURCHF, EURCAD, EURAUD, EURNZD
Tuesday: EURJPY, GBPJPY, CHFJPY, CADJPY, AUDJPY, NZDJPY
Wednesday: GBPCHF, GBPCAD, GBPAUD, GBPNZD
Thursday: AUDCHF, AUDCAD, AUDNZD