Cable Crosses Hold Up but Rally Looks Tired


GBPJPY - We are treating the decline from the top to 221.05 as wave A in a 3 wave correction - the bounce to 239.75 was wave B and wave C may be underway now. Last week?s low broke below the previous week?s low for the first time since the bounce from 221.05 began (last week?s candle also was a bearish engulfing candle). It is possible that a new high is registered above 239.75 in a small 5th wave that would complete wave c of the a-b-c from 221.05. This scenario is shown on the chart below. A clear break of channel support (near 238.30 right now), signals that the turn has occurred.

GBPCHF - The GBPCHF has been bouncing off of the 100 day SMA since early April but MACD and RSI continue to diverge with each successive high. The choppy range that has persisted for most of the month may give way to a thrust higher before the GBPCHF begins its anticipated decline. Resistance is at the 78.6% of 2.4757-2.3288 at 2.4443.

GBPAUD - A 5 wave decline that began at 2.5492 is complete at 2.3733 and the rally taking place should prove corrective. We are looking for a return to the 5/8 high of 2.4338, although we won?t be able to say that a correction is complete until we see a full 3 wave rally in place.