We were fairly confident that 2.0963 marked the end of wave iv within the 5 wave drop from 2.4426. However, the decline from 2.0963 is in just 3 waves, so expect a new recovery high and test of the 38.2% at 2.1249 (and former support, which should be resistance now) before the wave iv top is in place.
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 1.9011.
The bearish bias remains because of the resistance line drawn off of the 8/17/07, 12/17/07, and 3/20/08 highs. Potential support is at a line that is extended from the 10/29/07 and 2/28/08 lows; at 2.0026 today (decreases about 9 pips per day). This level is supported by the psychological 2.00. The rally from 2.0318 is in 3 waves, so another low (below 2.0318) is likely before potential for a major low to form exists.
Quite often, it is the simplest charts that tell us the most. The February low made a double bottom with the December 2006 low just above 2.41. Since then, the GBPNZD has held above a short term support line. The rally is choppy but as long as price makes higher lows, then potential for a much larger bull move exists.
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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