- Euro In Deeper Correction?
- Japanese Yen 113.99 Pivot
- British Pound 5 Waves Down From 2.0316
- Swiss Franc Small Triangle?
- Canadian Dollar Wave 4 Possibly Complete at 1.0064
- Australian Dollar Supported at .8600
- New Zealand Dollar Should Work Higher to Complete Wave C
SEE A DECRIPTION AT THE BOTTOM OF THIS REPORT FOR JTRENDW AND JTRENDD
Commentary: We wrote yesterday that “the rally from 1.3360 appears to be in 5 waves and may very well be complete or close to complete. A correction of this rally is expected to unfold soon and bring price back to at least 1.3828. However, from a trading perspective, there is no reason to fade this move until we see a clear decline in 5 waves followed by a corrective setback.” The decline from 1.4130 to 1.4061 is in 5 waves and is most likely wave a of an a-b-c correction. The bounce looks like an expanded flat as wave b. A very short term bearish bias is warranted against 1.4130. Support may be strong at 1.4040 (former 4th wave). As mentioned, a deeper correction would possibly test 1.3828. The structure of the decline will alert us to the bearish potential.
Strategy: Very short term idea?.bearish now, against 1.4130, targets at 1.4040 and 1.4000
Commentary: We have continued to state that we expect a return to 118.00 in order to complete wave C of the A-B-C from 11.59 and that this count remains favored unless price drops under 113.99. 113.99 is awfully close to being breached so please keep the alternate that we proposed last week in mind. The triangle scenario would most likely lead to weakness below 114.00 that proves marginal before a small bounce in wave e completes the triangle. This is the pattern we are showing today.
Strategy: Remain bullish, move risk to 113.99 (from 112.59), target 118.00
Commentary: The decline from 2.0317 appears impulsive (5 waves), therefore any bounce offers a chance to get bearish against 2.0317. Bigger picture, there are a few patterns that may be unfolding from 2.0366. A triangle may be underway or a large flat. In the latter scenario, price should come under 1.9879 before the decline is complete. The most bearish count has the decline from 2.0366 to 1.9879 as a 5 wave impulse followed by a 3 wave countertrend advance that ended at 2.0317. In this instance, the decline underway now is wave 3. In any case, allow for a bounce before getting bearish as all three of the mentioned patterns are at least near term bearish.
Strategy: Exit longs (small profit), bearish on a bounce to 2.0170, against 2.0317, target TBD
Commentary: Remember that the larger pattern has the USDCHF thrusting lower from a triangle and thrusts from triangles are terminal. We wrote yesterdat that “the decline from 1.1922 does not look complete. Allow for a rally through 1.1771 to complete wave 4 within the 5 wave decline from 1.1922 before wave 5 registers a new low (below 1.1677). That would possibly complete the thrust lower from the triangle.” Price never exceeded 1.1771 to complete a flat so a triangle may be unfolding as wave 4. If this is the case, then additional consolidation will be followed by a new low (below 1.1677) before a larger recovery.
Commentary: We have favored a larger correction to 1.0173 (former 4th wave) to unfold as wave iv of 3 before a drop to a new low in order to complete wave 3 and give way to a larger correction. Given the corrective nature of the advance from .9936, it is possible that wave iv of 3 is close to complete (or already complete), so a drop to a new low may happen in the next few days. There is no reason to get bearish now though, as we still expect a drop to a new low to be fully retraced since the decline would complete wave 3 within the 5 wave bearish cycle from 1.0866.
Strategy: Move to flat (from bullish?small gain)
Commentary: We wrote testerday that “the correction unfolding from .8702 is either complete at .8605) or the decline from .8702 is just the first leg in a more complex correction. In the latter case, price should drop below .8605 (marginally) before the next bullish leg gets underway. We favor this scenario because the rally from .8605 is not an impulse.” The Aussie has dropped close to .8605 but has yet to drop beneath. We still expect a drop below .8605 to complete the correction from .8702.
Commentary: Although bullish, we have warranted caution because the first bullish objective (the 100% ext. of .6639-.7272/.6824 at .7456) was already hit. It is possible that the sharp decline from .7486 is wave iv of wave c but 4th waves are rarely sharp. Still, this is our working assumption as long as price is above .7185 (top of wave i of c). A psuh through .7486 could lead to a sharp reversal.
Strategy: Remain bullish, against .7185 target .7547/89
JTRENDW uses 13 week RSI in order to gauge strength of trend. The trend is considered Bullish if the indicator registers a reading above 60. The trend is considered Bearish if the indicator registers a reading below 40. If the reading is between 40 and 60, then the reading is Flat. The JTRENDD uses 13 days of data. An example of JTRENDW is below for the EURUSD.