AUDUSD: Aggressively Bullish Against .8710

• Euro Triangle Potential
• Japanese Yen Wave C In Progress
• British Pound Consolidates
• Swiss Franc Unclear
• Canadian Dollar In Beginning of Deep Correction?
• Australian Dollar Aggressively Bullish
• New Zealand Dollar Closes Above Trendline

Commentary: In Elliott, our job is to follow the pattern and trade accordingly. As the pattern evolves, so too should our strategy. We have favored the bear side near term recently due to the idea that larger wave B within an A-B-C correction from 1.4966 is complete at the 50% of 1.4966-1.4525 (wave A). This remains our favored count unless price pushes through 1.4750. If that happends, then wave B is a more complex correction itself, with a triangle as b of B, as shown in the chart above. In summary, remain bearish for the drop to the 1.4400’s against 1.4750. If 1.4750 gives way, then price is likely to test at least the 61.8% of A at 1.4800 and maybe the 78.6% at 1.4873.

Strategy: Bearish now, against 1.4750, target 1.4360

Commentary: We wrote yesterday that “we maintain a cautious bullish bias as long as price is above 109.56 in part because the decline yesterday was in only 3 waves, which is corrective. As we have focused on in recent days, the rally from there may be part of wave C within an A-B-C rally from 107.20. A would equal C just below the 61.8% of 117.93-107.20 at 113.83.” This remains the favored count as long as price is above 110.48.

Strategy: Flat

Commentary: Cable continues to range but be careful if on the bearish side as the pair has bounced from long term channel support. Much like the EURUSD, Cable may continue to range before dropping a bit lower, perhaps to test the 100% extension of 2.1160-2.0353/2.0831 at 2.0024.
Strategy: Flat

Commentary: With the near term count unclear, we are sticking with the idea that the USDCHF is could top and head lower to complete the larger decline from 1.2468. We wrote yesterday that “with price pushing through 1.1353, it is clear that wave v of 3 is not yet underway. The next level of potential resistance is the 50% of 1.1896-1.0886 at 1.1391. Look for a top and reversal now, which is just in front of the psychologically important 1.1400 as well.” We are not very confident in the count right now and are standing down from taking any action.
Strategy: Flat

Commentary: This is one count that we are working with in the USDCAD. It labels the rally from .9055 as an impulse with an extended 5th wave in the form of a diagonal (overlapping). Under this count, larger wave 2 is likely to be a deep retracement, potentially bringing price all the way back to the 61.8% of .9055-1.0216 at .9499. This is also the origin of the diagonal and price often retraces the entire diagonal when that diagonal is in the 5th wave position.
Strategy: Bearish, against 1.0216, target 1 at .9790

Commentary: We wrote yesterday that “the rally from .8659 to .8895 can be counted as a 5 and yesterday’s decline is a 3 (much like the USDJPY decline). A push above .8845 near term would make the rally from .8710 a 5 wave affair and give way to a corrective setback, which would present an opportunity to get bullish (see the arrows that outline the expected path on the chart).” The rally did push through .8845, all the way to .8906. The pair has corrected as expected and we advocate an aggressive bullish stance against .8710.
Strategy: Bullish, against .8653, target .9140

Commentary: “We have favored the idea that a larger correction is unfolding to more fully correct the 5 wave advance from .6639-.7891 but the decline has yet to occur and Kiwi is testing the wave 5 high. While an expaned flat is certainly possible, we urge caution to bears that are attempting to catch the C wave decline into the .7200’s and lower. The rally from .7435, although choppy, could be a series of 1s and 2s. In this case, the NZDUSD rally could accelerate in a 3rd of a 3rd wave higher. Additionally, the pair is making a bid to close above the resistance line drawn off of the July and November highs. A daily close above there adds fuel to the bullish fire.” The pair closed above the line yesterday, which warranted adopting a bullish bias.

Strategy: Flat