Expect a oush through 1.58 next week. We touch on the EURUSD bullish potential in the techs today as well near term USDJPY possibilities.
Now that the EURUSD has broken through 1.5586 and confirmed our bullish bias, we can focus on bullish potential. The advance from 1.5283 is probably either the beginning of a 5 wave bull cycle or a B wave of a flat or triangle. In all cases, the EURUSD is expected to exceed 1.5843. Near term resistance is at 1.5650 (6/10 high). We’ll look to add to longs next week. Risk can be moved to 1.5464.
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STRATEGY: Bullish, against 1.5464, target above 1.5843
Near term, expect this decline to test the 6/11 low of 106.56. A deeper decline is possible; which would likely serve as wave B (or X) within the correction from 95.72. The advance has formed a channel and the upper end of the channel is not until the 111/112 area. Also, the wave from 102.58 would equal the 95.72-105.70 advance at 112.62. The upper channel line intersects 112.62 in the middle of July.
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We still expect a push through 1.9850 by July but near term, the probability of a corrective decline is high as suggested by the 5 waves up from 1.9469. As such, it is wise to lighten up on longs. We’ll look for support next week beginning at 1.97.
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STRATEGY: Bullish, against 1.9469, target above 1.9850 (BUT lighten up on longs as the probability of a correction is high)
“There is little doubt that the advance from .9647 is corrective because a triangle separates the two legs. The only question is whether or not the rally from .9647 is a complete 3 wave rally or just the first wave of a larger more complex correction.” The down-up-down-up sequence since the 1.0624 top is most likely a series of 1st and 2nd waves. A bearish bias is warranted against 1.0473. Still, the USDCHF pattern is not nearly as clear as the EURUSD pattern, so confidence in this pair is low right now.
A triangle is unfolding. Expect wave E of the triangle (underway now) to be sharp and end below 1.00. This decline will present a high reward/risk opportunity against .9818. A breakout in larger wave C towards 1.05/08 is expected to follow completion of the triangle.
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STRATEGY: Bullish, against .9818, target above 1.0324 (but should be in a small position now since the triangle is unfolding, add to longs below 1.00)
The AUDUSD advance has accelerated and price has pushed through .9486 (former support), confirming that the decline from .9653 was corrective and that the AUDUSD is headed to a new high as we have long suspected. “The rally from .8952 is wave C of a large 5th wave diagonal that could extend to a measured objective just below 1.00 in coming weeks (.9936).” Risk can be moved to .9402
STRATEGY: Bullish, against .9402, target TBD
Given the counts in the other USD pairs, we do not think that the NZDUSD advance from .7445 is complete but a sizeable correction is probably underway. The rally from .7445 consists of 2 nearly equal waves (a-b-c) and could be wave A of a flat. Bigger picture, the NZDUSD is expected to advance 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.
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</p> STRATEGY: EXIT