Euro Set to Break Below 1.2865
Japanese Yen Turning
British Pound Focus On 1.9316
Swiss Franc May Also Decline in 5th Wave
Canadian Dollar Breaks 1.1850
Australian Dollar Short Term Triangle
New Zealand Dollar Gains Short Lived
EURUSD It looks like the 5th wave down (in a 5 wave bearish sequence that began at 1.3367) started at 1.3066. We are looking for a low to be made below 1.2865, which would be followed by a rally that will retrace a portion of the decline from 1.3367. Measured objectives are centered near 1.2750. The 61.8% extension of 1.3367-1.2865 / 1.3066 is at 1.2756 and the level where wave 5 would equal wave 1 is at 1.2747. Only a rally above 1.3066 (Fridays) high negates the near term bearish structure. A decline below 1.2865 satisfies minimum expectations for a 5th wave down.
USDJPY The USDJPY may be tracing out a 3 wave zigzag correction. The decline from 122.21 to 120.10 would be the first of that 3 wave correction (wave A) and the bounce to 121.38 would be the second wave (wave B). A third wave (wave C) decline could extend to 119.26, which is where waves A and C would be equal. 119.26 is also the 38.2% of 114.43-122.21. Price is slipping below the 20 day SMA today, which has held as support since early December. 121.38 needs to hold in this case.
GBPUSD Cables rally was rejected at the 61.8% fibo of 1.9915-1.9482 at 1.9750 on Friday and price has fallen nearly 200 pips since 1.9750. The decline from 1.9750 is the either a 3rd wave down or a C wave down. In either case, price expected to fall below 1.9482 before a concerted rally attempt takes place. A measured objective for the end of this 3rd (or C) wave is 1.9316, which is where the decline from 1.9750 would equal the 1.9915-1.9482 decline. Near term resistance is at the 2/2 low at 1.9636.
USDCHF A wave 4 correction may have ended at 1.2377 on Friday. A break above 1.2575 would confirm that the decline to 1.2377 was indeed corrective and that a wave 5 was underway. Wave 5 (beginning at 1.2377) would equal wave 1 (1.1878-1.2274) at 1.2769 (very close to the 10/13/2006 high at 1.2773). Similar to the EURUSD (but the inverse), a rally above 1.2575 satisfies minimum expectations for wave 5.
USDCAD The USDCAD finally pushed above the 1.1850 level on Friday. 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. A rally much above 1.1883 gives scope to a test of the psychological 1.2000 level. A decline below 1.1737 would suggests that the pair has topped.
AUDUSD The AUDUSD appears to be forming a short term triangle. There are 5 waves within the triangle, so a thrust lower should come soon. A decline below .7698 would indicate that the thrust lower had started and focus would then shift to the 11/13/2006 low at .7614. A rally above .7773 negates the triangle possibility.
NZDUSD Kiwi bounced at .6778, which is where the decline from .7034 equaled the .7096-.6840 decline. If .6778 fails to hold, then projected support is at the 161.8% extension at .6619. Resistance is at todays reaction high at .6868. Daily oscillators are bearish with CCI below -100. A cross above -100 would indicate a reversal opportunity.