The Top Ideas report released at the beginning of every week includes TREND analysis and SENTIMENT analysis. The STRATEGY table is updated everyday as risk and target levels change.
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A triangle as a 4th wave may be complete at the 2/7 low of 1.4438. Expectations are for a bullish breakout that in the coming weeks that completes wave 5 within the 5 wave advance from 1.3261.
Visit our recently updated Euro Currency Room for specific resources geared towards this currency.
The drop from 1.4757 was in 3 waves and price continues to hold above an unorthodox trendline. There is the possibility that a rally through 1.4757 would complete 5 waves up from 1.4438 and give way to another correction. However, it is also possible that the EURUSD is subdividing higher in a larger 3rd wave. With this in mind, the best strategy is to keep moving the stop up.
Visit our recently updated Euro Currency Room for specific resources geared towards this currency.
STRATEGY: Bullish, against 1.4609, target mid 1.50s
Longer term, we maintain that a 12 year triangle ended at 124.13 in June 2007 and that the USDJPY is headed lower for a test of its 1995 low at 81.12. Since 124.13, the USDJPY has traced out a series of 1st and 2nd waves. The decline should accelerate in the next month or so in wave 3 of 3. This forecast remains intact as long as price is below 114.65. Resistance should be strong near 110.00 (Fibo and congestion).
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For the first time in months, the GBPUSD daily count is clear. The pair has declined in 5 waves from 2.1160, indicating that a significant top is in place. The 5 wave decline is viewed as either wave 1 in a 5 wave bear cycle or wave A in a 3 wave bear cycle. In other words, longer term bearish potential is great. The rally underway now is either wave 2 or B and we will look for a top in the 2.0033-2.0463 zone. This corrective rally probably lasts for weeks if not most of this month. Also, the GBPUSD rallied for 5 consecutive days ending Thursday. A string of consecutive days usually occurs in the beginning or middle of a strong rally. In this case, it is likely the beginning of wave C.
Visit our recently updated British Pound Currency Room for specific resources geared towards this currency.
A corrective 4th wave rally may be underway now within the 5 wave decline from the October 2006 high at 1.2768. The USDCHF will likely trade in a choppy manner for the next month or so, but with an upside
bias before a decline in a 5th wave completes the entire decline from the October 2006 high and gives way to a multi-year low.
The pattern in the USDCAD since the November low at .9055 is either an A-B-C rally that will lead to a new low (under .9055) or a 1-2 (expanded flat) base that will lead to a strong rally to new highs (suggesting that a multi-year USDCAD low is in place). Either way, price will come below .9755. Potential support from Fibonacci is at .9652 and .9511.
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We wrote yesterday that “the rally from .9871 could reverse near the 61.8% at 1.0184 or the 78.6% at 1.0269. One reason that we are confident in the bearish case against 1.0378 is that the rally from .9871 to 1.0124 was in 3 waves, which is countertrend.” The reversal occurred at 1.0197 and it is probable that the USDCAD downtrend is back underway.
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency.
STRATEGY: Bearish, against 1.0378, target below .9755
As long as the AUDUSD rallies in 5 waves and declines in 3 waves, there is no reason to adopt a bearish outlook. The rally from .8512 is expected to exceed .9400 in the coming weeks. Objectives are near 1.00.
At first glance, the AUDUSD decline from .9236 to .9111 looks like an impulse. However, a closer look reveals that the drop is in 7 waves – which is a correction (zigzag). As such, the trend remain up and risk can be moved to .9111. There is no change to the call for a rally to reach the mid .90s, and maybe even 1.00.
STRATEGY: Bullish, against .9111, target TBD
[B]The drop on 1/22 to .7383 completed a large correction that had been underway since November. Like the AUDUSD, the NZDUSD trend remains up and an upside breakout will probably lead to a test of the July 2007 high at .8108.[/B]
[B]We wrote yesterday that “the count that we have presented above treats the rally from .7781 to .7927 as wave 1 in a 5 wave advance. The drop today presents an opportunity to get long against .7841.” The most bullish count places the NZDUSD as ready to break out from a series of 1st and 2nd waves. There are no finite targets yet. [/B]
[B]STRATEGY: Bullish, against .7902, target TBD[/B]
[B]
Tell us what you think about this report: contact the strategist about the article at <[email protected]>[/B]
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It is possible to count 5 wave up from 1.0728 to 1.1103. An a-b-c decline to 1.0885 could be the first wave in a complex correction (W-X-Y). Wave X then is underway now and is taking the form of a triangle. A thrust lower (below 1.0885) would complete wave Y and larger wave B, which would set the stage for a C wave rally into 1.12/13. We will watch for this pattern to resolve itself and look to buy the B wave low if given the chance.