· Euro May Decline in 5th Wave
· Japanese Yen 120 holds
· British Pound Reverses…Again
· Swiss Franc Picking Up Steam
· Canadian Dollar Topping
· Australian Dollar .7700 key Support
· New Zealand Dollar Continues Decline
EURUSD If the decline from 1.3367 is to trace out 5 waves, then the 5th wave down needs to start right now. The rally from 1.2876 to 1.3055 is 179 pips, which is nearly identical to the 1.2865-1.3055 rally (190 pips). The equal legs suggests that the rally from 1.2865 could be a 4th wave correction. The first indication that a 5th wave down was in progress would be a decline below 1.2982. Measured support on a break below 1.2865 is where wave 1 would equal wave 5 at 1.2739 (1.3055 (1.3367-1.3051). 1.3055 needs to hold for the bearish scenario to play out.
USDJPY The USDJPY is turning up from the 50% fibo of 117.97-122.21 at 120.08. A long term measured objective is at 128.67 which is where the advance from 108.96 would equal the advance from 101.67 to 121.38. We have a shorter term measured objective at 123.21, which is where the rally from 117.97 would equal the 114.42-119.67 rally. 120.10 is support.
GBPUSD Yesterdays rally reversed just shy of the 61.8% of 1.9915-1.9481 at 1.9751. Weakness from 1.9915 may b just the beginning of a much larger decline. Projected support is not until where the decline from 1.9740 equals the 1.9915-1.9482 decline at 1.9307. 1.9740 must hold for the bearish structure to remain intact.
USDCHF The USDCHF turned lower following the 5th wave rally to 1.2575. Expectations are for a 3 wave correction. A break below 1.2376 conforms that a short term top is in place. Fibonacci support begins at the 38.2% of 1.1880-1.2575 at 1.2309. Since this weakness is likely the beginning of a larger 2nd wave lower, expect a deeper retracement to challenge the 61.8% at 1.2146.
USDCAD The USDCAD continues to trade sideways at the top of its yearly range. The 1.618% extension of 1.0927-1.1456 / 1.1028 is at 1.1883. 1.1883 is an ideal topping area for the USDCAD before the pair resumes its longer term downtrend to below 1.0927. The potential 2+ year bearish channel reinforces resistance at the current juncture. The topping scenario is best served by one more rally to above 1.1850 in order to complete 5 small waves from 1.1644. A decline below 1.1644 suggests that the decline has already started.
AUDUSD The initial rally off of the low at .7698 was retraced to .7715. A rally above .7773 would complete a 3 wave correction and give scope to additional weakness. Measured resistance is where the rally from .7715 would equal the .7698 to .7773 rally at .7791. This is also where the 38.2% retracement of .7941-.7698 comes in. A decline below .7698 suggests that the next leg down is already in progress.
NZDUSD Kiwi is nearing .6778, which is where the decline from .7034 would equal the .7096-.6840 decline. This measured objective intersects with the 11/29 and 11/30 lows. If projected support fails, then the decline may extend to the 161.8% extension at .6619. Former support (now resistance) at .6840 is key to the bearish case.
Glossary of Terms
CCI(20) 20 day Commodity Channel Index
> 0 bullish
0 > bearish
> 100 extremely bullish
-100 > - extremely bearish
RSI(14) 14 day Relative Strength Index
> 50 bullish
50 > bearish
> 70 overbought
30 > - oversold
MACD ? - MACD slope (MACD MACD)
> 0 bullish
0 > - bearish
Mom(21) 21 day Momentum
> 0 bullish
0 > - bearish
ATR(14) 14 day Average True Range (volatility)
Medium 75th percentile* > ATR(14) > 25th percentile*
High - > 75th percentile*
Low 25th percentile* >
*measured against past 3 months