The GBPCHF remains entrenched in a 4th wave correction that will probably complete as a triangle. The rally from 1.9421 to 2.0963 is in 3 waves and would be wave A of the triangle. Wave B is underway now and will likely end near 1.97/99. In summary, expect the GBPCHF to range for the next few months. Beware though that we do expect a new low (below 1.9421) in a 5th wave (which could happen without a triangle unfolding).
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 1.9287.
The bearish bias remains due to 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 2.0010 today. This level is supported by the psychological 2.00 figure. We wrote last wek that “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.” We got that low today at 2.0294 so watch for a reversal.
We maintain that the GBPNZD is setting up for a major bullish reversal. The February low made a double bottom with the December 2006 low just above 2.41. Since then, the GBPNZD has trading in a choppy range. Still, 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