- Euro Structure Remains Bullish
- Japanese Yen Correction
- British Pound Gets Slammed - Bullish Opportunity
- Swiss Franc Confusing
- Canadian Dollar Basing
- Australian Dollar Continues Assault
- New Zealand Dollar Potential Resistance Near .7650/75
EURUSD
Commentary: The EURUSD bullish scenario is playing out but price needs to remain above 1.3391 for us to keep looking higher. The period of softeness from 1.3552 is most likely a second wave pullback and Fibonacci support rests between 1.3453 and 1.3491 (38.2%-61.8% of 1.3392-1.3552). We?ll reiterate what we have for the past few weeks - be careful trading from the long side as the sentiment backdrop gives scope to a larger reversal. Since price pattern (the 3 wave drop from 1.3680 is the dominant pattern and is bullish) has yet to confirm such a reversal, so it is wise to remain bullish.
Strategy: Bullish now, against 1.3391, targeting above 1.3680.
USDJPY
Commentary: We remain bearish against 122.13. The clear break of the trendline drawn off of the 4/19 and 5/11 lows and a 5 wave decline from 122.13 gives scope to more losses. The rally from 120.75 is most likely a second wave in a larger 5 wave decline. However, it is unclear whether or not the upward correction is complete. Resistance is clustered from 121.44 to 121.83 (50%-78.6% of 122.13-120.75). Potential trendline resistance is at 121.50 and the former support line (off of the 4/19 and 5/11 lows) is near 121.60 (which is th 61.8% of 122.13-120.75).
Strategy: Bearish Now, against 122.13, target TBD
GBPUSD
Commentary: Similar to the EURUSD, Cable continues to exhibit impulsive characteristics to the upside. A 3 wave correction appears to be nearing an end. Support should be strong at 1.9821, which is the 61.8% of 1.9732-1.9964. Rallying through 1.9905 would confirm the bullish bias. We are confident in the bullish case above 1.9732 due to the 3 wave correction that took place from 2.0131-1.9676. Price must remain above 1.9732 for the bullish structure to remain intact. If 1.9732 is broken, then the alternate count would be favored, which has an a-b-c correction ending at 1.9964.
Strategy: Bullish now, against 1.9732, targeting 2.0131
USDCHF
Commentary: Trendline resistance (drawn off of the October 2006 and January 2007 highs) has capped gains just above 1.2300. With shorter term trendline support failing to hold this week, it is likely that the USDCHF is headed lower. Ultimately, we are looking for a test of 1.1877. Short term, resistance should be strong near 1.2258, which is the 61.8% of 1.2329-1.2145. 1.2328 must hold in order for the bearish structure to remain intact. 8 month trendline resistance should be strong near 1.2300.
Strategy: Bearish at 1.2196, against 1.2328, targeting 1.1877
USDCAD
Commentary: The USDCAD continues to drop below every measured objective for the end of large larger wave 3. Still, the next few weeks should see the USDCAD consolidate / pullback towards 1.0849/1.1036 (23.6% - 38.2% of 1.1825-1.0548) in wave 4 before wave 5 drops to a new low. We?ll watch the form of the correction that unfolds so that we can align with wave 5 lower. As soon as we see impulsive upside action, we?ll commentate on short term bullish opportunities.
Strategy: None
AUDUSD
Commentary: With 5 waves higher from .8162 and a larger 5 wave structure from the October low at .7415, risk has shifted to the downside and a test of former 4th wave support at .8397 is in order. If price does continue higher, then look for resistance near a potential resistance line drwn off of the December and April highs. That line is near .8570. A deeper correction is possible and we?ll have to watch the form of the correction, which should last at least a few days, before making a stand.
Strategy: None
NZDUSD
Commentary: Kiwi is in the same position as the AUDUSD as bulls remain in control. Potential trendline resistance is near .7650/75. The NZDUSD is vulnerable to a pullback though as RSI is overbought on every timeframe from weekly on down. The trend remains up as long as price is above today?s low of .7485.
Strategy: None