Euro 1.3142 Important In Short Term
Japanese Yen Weakness Likely to Extend Near Term
British Pound Rejected at Fibo
Swiss Franc in Tight Range
Canadian Dollar Rally Underway
Australian Dollar .7840 Key
New Zealand Dollar in 4th Wave Correction
EURUSD Ultimately, we look for the decline that began at 1.3262 to test at least 1.2757. This is where the decline from 1.3262 would equal the 1.3370-1.2865 decline. The major long term supporting trendline intersects with the 1.2700 figure at the end of March. Near term, the rally from 1.3072 to 1.3143 is likely a small degree 4th wave that should roll over from below 1.3143, bringing price under 1.3072 in the next day. The short term bearish target is the 161.8% extension of 1.3262-1.3142 / 1.3215 at 1.3022.
USDJPY Given the fact that daily RSI has turned up from below 30 and that daily CCI is turning up from below -100, we are looking for the USDJPY to challenge at least the 38.2% of 121.66-115.15 at 117.63. This Fibonacci level coincides with former congestion. This short term bullish scenario is best served with short term support holding at 116.20. A rally to 117.63 / 118.00 (117.98 is where the rally from 116.20 would equal the 115.15-116.91 rally) would possibly complete a 4th wave correction and give way to another bout of weakness to below 115.15.
GBPUSD A small degree wave 4 likely ended at 1.9361 last night. 1.9361 is the 38.2% of 1.9655-1.9183 and the correction from 1.9183 is in 3 waves with waves A and C of that correction roughly equal (1.9183-1.9307 = 124 pips : 1.9229-1.9361 = 132 pips). Price should come under 1.9183 with 1.9361 resistance remaining intact. A break below 1.9183 may test the 61.8% of 1.8515-1.9915 at 1.9055. However, a decline below 1.9183 satisfies minimum expectations for the 5th wave. Since GBPUSD is in a wave 5 (compared to EURUSD in a wave 3), expect a correction back to 1.9360sh once a wave low is established.
USDCHF Little is changed regarding the USDCHF. We still favor the bottoming scenario with risk at 1.2109. The next move of consequence should be in a wave C rally (inverse of EURUSD) to above 1.2575. A push through Fridays high at 1.2264 bolsters the bullish scenario. Daily CCI has increased from below -100, which signals a reversal (higher).
USDCAD The long term bearish bias remains intact. The decline off of the top of the 2 year channel combined with the outside monthly reversal favor the downside. Ultimately the decline from 1.1879 should come under 1.0927 to complete a 5th wave. The rally from 1.1564 has retraced 78.6% of the 1.1879-1.1564 decline in a 2nd wave. The next few weeks should see price come under 1.1564 and possibly even 1.1250-1.1326 which marks the 138.2% to 161.8% extensions of 1.1879-1.1564 / 1.1761. 1.1880 is critical resistance. A push above, while not expected, targets the 1.2000 figure. Coming under yesterdays low at 1.1731 bolsters the bearish outlook.
AUDUSD The AUDUSD wave 4 correction that we wrote about yesterday has extended to the 50% of .7895-.7680 at .7787. Price must remain below .7840 in order to keep the bearish structure intact but the 61.8% at .7812 should provide formidable resistance. The upside looks limited at this point and price should come under .7680 in a 5th wave decline before a larger upward correction takes place.
NZDUSD Kiwi has also corrected recent weakness from .6720 in a 4th wave. The 38.2% of .7036-.6720 at .6841 has held as resistance and the rally from .6720 is in 3 waves. The pair should roll over from near current price and come under .6720 in a 5th wave decline. If resistance at .6861 fails, then this wave 4 may extend to the 50% at .6878.
