Euro Tests 1.3100
Japanese Yen 121.00 Resistance (USDJPY Support)
British Pound Takes Out 1.9500
Swiss Franc 1.2375 Still Key
Canadian Dollar 5 Waves Up (Down in USDCAD)
Australian Dollar Rallies In 5 Waves
New Zealand Dollar Digests Gains
EURUSD The break above 1.3066 strongly suggests that 1.2876 marked the end of a bearish wave at 1.2865. The decline from 1.3367 is either an A wave or a truncated 1st wave (truncated because the 5th wave did not drop below wave 3). In either case, a countertrend rally to fibo resistance is likely the next significant move. The 61.8% of 1.3367-1.2865 at 1.3177 bears watching as does the 78.6% at 1.3261. In the short term, there are a distinct 5 waves up from 1.2941 to 1.3105, so look for a setback towards the 38.2% at 1.3042 (which also is aligned with former resistance, which should now be support).
USDJPY We have recently focused on the 5 waves up from 119.96 and mentioned that a corrective decline is probable. In the event of a decline, look for initial support at the 38.2% of 119.96-121.66 at 121.01. This is also the 4th wave of one lesser degree (2/8 low). Price slipped just below 121.01 this morning, bottoming at 120.86 before rallying up towards 121.10. There may be more room to the downside though. A decline below 119.97 would possible complete a 3 wave correction from 122.21 (wave A would equal wave C at 119.86). Price has slipped below the 20 day SMA as well.
GBPUSD We wrote yesterday that an a-b-c correction from 1.9915 may be nearing an end as there are 5 waves down in the C position (from 1.9750). The 78.6% of 1.9260-1.9915 defends the area where A (1.9915-1.9549) would equal C (from 1.9750) at 1.9380. Cable has turned higher this morning, stalling at the 2/12 high of 1.9569. 1.9402 must hold for the bullish case suggested by the end of a 3 wave correction at 1.9402 to remain intact. Fibonacci support begins at the 38.2% of 1.9402-1.9568 at 1.9505. Resistance above 1.9569 is the 2/9 high at 1.9605, which is followed by a potential resistance trendline drawn off of the 1/23 and 2/8 highs at 1.9668.
USDCHF The USDCHF has held 1.2375 (the equivalent level in the EURUSD was 1.3066). A final 5th wave that would complete a 5 wave sequence from 1.1878 is still possible since price remains above 1.2375. The next bullish target is the 1.618 extension of 1.2271 1.1878 / 1.2110 at 1.2746. Only a decline below 1.2375 negates the bullish wave implications. Focus would then shift to Fibonacci support of the 1.1878-1.2575 rally, beginning at the 38.2% at 1.2313.
USDCAD Fridays turn lower likely marks the resumption of the long term downtrend. Long term focus is to below 1.0927. Since there are 5 waves down from 1.1879 (ending at 1.1659 this morning), now is not the time to get short term bearish. A bounce to Fibonacci support could see the 38.2% at 1.1743 or the 50% at 1.1769 (which is also the 4th wave of one lesser degree). A decline below 1.1645 warrants a breakout strategy.
AUDUSD The AUDUSD has rallied to and slightly exceeded the 2/9 high at .7827. The breech of .7827 gives scope to additional gains in the medium term. In the short term (next day or so), look for a corrective setback since there are a clear 5 waves up from .7707 to .7833. The 38.2% at .7785 is initial support. Also supporting the bull case is the rally above the 20 day SMA.
NZDUSD We have concentrated recently on the fact that Kiwi bounced from where the .7038 decline equals the .7099-.6841 decline. As such, we are left with just a 3 wave correction of equal legs from .7099. This structure is suggestive of a bottoming in NZDUSD (as long as .6769 holds). The rally to .6932 is impulsive and warrants a bullish bias. Price is currently correcting recent gains and support is nearby at the 38.2% of .6818-.6932 at .6889 and the 61.8% at .6862.
