An expected USD decline is underway, but that decline should prove corrective. Levels to watch for reversals tomorrow or next week are EURUSD 1.58, USDJPY 105, and AUDUSD .9575.
There are still 2 counts that we are following (both treat the decline from 1.6039 as wave C that will not end until below 1.5283). “The first is that wave 3 of C is underway from 1.5768. If correct, price will remain below there. The other count is that wave 1 of C is complete (or very nearly so) and that wave 2 will bring the EURUSD back to 1.58 or so before the decline continues.” The scope and form of the rally from 1.5521 has us favoring the latter scenario. Resistance should be strong at the 7/28 high (1.5768); which is defended by the 21 day SMA at 1.5761.
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STRATEGY: Bearish, against 1.5944, target below 1.5283
The USDJPY remains choppy. To review, the rally from 95.72 is in 3 waves but so too is the decline from 108.57. Short term, expect weakness in either wave c of a triangle (red letters) or in a small 2nd wave that serves to correct the advance from 103.76. Potential support is in the 106.00/50 zone as well as the 6/30 low at 104.99.
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There is no change to the near term GBPUSD bearish outlook. “It is likely that wave D of the triangle is underway towards 1.9550/1.96. This is our stance as long as price is below 2.0075.” Short term, 1.977 may serve as resistance.
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FINALLY! The USDCHF count is clear for the first time in some while. To review; “under the preferred count, the 3 wave rally from .9647 was wave W in a complex correction. The choppy decline from above 1.06 serves as wave X and wave Y is underway now. Expect the advance to reach 1.10 (former 4th wave and wave Y = wave W at 1.0986).” The advance from 1.0010 is in 5 waves, so expect a corrective decline back to at least 1.0326 (38.2% and former support). We’ll look to identify a low next week.
The USDCAD is preparing to break out from its 6 month triangle. This bullish break will complete a 3 wave corrective advance from .9055. Objectives are in the 1.05-1.08 zone. We’ll look to identify support and lessen risk as the advance matures.
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STRATEGY: Bullish, against .9974, target above 1.0378
We’ve altered the AUDUSD count slightly from yesterday but the implications remain the same. The decline to .9410 is in 5 waves and is probably wave 1 of A down of the next larger degree. What this means is that the longer term trend is down. A corrective advance is expected to reach at least .9578 (former 4th wave and apex of former triangle).
The NZDUSD has entered a long term decline. Our longer term objective is not until below .5927. However, there will be countertrend movements along the way; one of which is probably beginning now. We’ll look to identify completion of those rallies and take advantage of the current downtrend. As of now, resistance is just below .75 but extends to .7583.
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