The British Pound crosses have taken a beating for all of 2008 and then some. Patterns in the GBPCAD and GBPNZD suggest that relief may be in sight.
The range that has persisted since the beginning of the year may be a flat correction as a 4th wave. If this is the case, then the GBPCHF should continue lower before establishing a significant low. Under the most bearish count, price should remain below 2.1539. However, based on analysis of the individual legs of the cross; Cable could be bottoming as could the USDCHF. This is suggestive of a more complex correction that could reach at least former congestion near 2.20.
The GBPCAD rally from 1.9011 to 2.0906 (mostly in November) is in 5 waves and the decline since then is in 3 (a-b-c). The next move is very likely higher in wave C or 3. The minimum objective is 1 pip above 2.0906. This outlook is favored as long as price is above 1.9011.
The GBPAUD is at its lowest level since May 1997 and there is probably a good deal more left for the pair to fall. Obscure pairs such as the GBPAUD rarely display clear wave patterns but general technical principles are still valuable. Potential measured support begins at 2.0418 and extends all the way below 2.00. When looking at the separate legs of the cross, the AUDUSD is in a strong uptrend and the GBPUSD may be bottoming. This translates into the GBPAUD continuing to drop, albeit at a slower rate of change.
Interestingly, the GBPNZD might be forming a significant bottom. There does appear to be a clear 5 wave advance complete with an extended 3rd from 2.4140 to 3.0673 with a huge A-B-C decline since. This suggests that the pair should turn up before 2.4140 (which is very close). We are unsure if counting waves works well on exotic crosses, but we’ll see.
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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: EURJPY, GBPJPY, CHFJPY, CADJPY, AUDJPY, NZDJPY
Tuesday: EURGBP, EURCHF, EURCAD, EURAUD, EURNZD
Wednesday: GBPCHF, GBPCAD, GBPAUD, GBPNZD
Thursday: AUDCHF, AUDCAD, AUDNZD
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