We see 2 counts that suggest a rally to new highs. We touched on one last week. “The pattern since the 7/13 high is treated as a completed A-B-C correction (with wave C truncated).” The other count that suggests a rally to new highs is an expanded flat. Wave B (specifically wave iii of c of B) would be underway now. Look for support near 165.
The advance from 192.60 is ideally wave 4 within what will probably be a 5 wave drop from 251.10. The pair has been testing the 38.2% of 242.60-192.60 at 211.70 for a week now. A break through there exposes where wave c of 4 would equal wave a of 4; at 216.13. The 200 day SMA reinforces resistance at that level.
The big picture focus remains on the potential A-B-C advance from the 2000 low at 58.82. Wave C would equal wave A (arithmetically) at 112.27 but waves A and C do not have to be equal. In fact, the advance has already satisfied minimum expectations. A long time support line has acted as resistance since December 2007. As long as price is below this line, we see potential for a top to form. Near term, it is possible to count 5 waves up from 98.27 so a correction back to at least the former 4th wave extreme near 102.50 is expected. There is also potential Fibo support from 100.57 to 102.00.
Price below 109.62 keeps the series of lower highs (and lower lows) intact; which is the definition of a bear market. The 200 day SMA is at 108.29 and should provide resistance if reached. A drop below the trendline from the March low would inspire confidence in the longer term bearish bias.
The rally from 88.17-101.09 is in 5 waves and is either a 1st wave or A wave. Therefore, wave 2 or B will begin very soon and bring the AUDJPY back to at least 96.15 (former 4th wave).
The NZDJPY remains stuck in a choppy consolidation and probably will for some time. That is not to say that there will not be rewarding opportunities though. In fact, there are 2 counts that suggest the next move is higher. If a triangle is unfolding since the July 2007 top at 97.74, then wave D is probably underway now to around 88. If a large flat is unfolding since the July top, then wave B of that flat is probably underway now and will exceed 91.42 in the next few months.
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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