The next bearish leg in the USDJPY is probably underway from 105.70. Eventually, a new low (below 95.72) is expected.
We are bearish as long as the EURUSD is below 1.5643. Potential resistance is from 1.5546 to 1.5563 (right above current level). As mentioned last week, 1.5230 is where the decline from 1.5694 would equal the 1.6018-1.5554 decline. This is our initial objective.
STRATEGY: Bearish, against 1.5643, target below 1.5230 and below 1.50
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The structure of the rally from 95.72 is evidence that the larger trend remains down. The advance consists of overlapping waves and can be counted as a double zigzag (W-X-Y); which is two 3 wave segments connected by an X wave. The USDJPY is at a support line right now and coming under there as well as 103.20 would strongly suggest that a wave 4 top is finally in place. On very short term charts, the drop from 105.70 is taking an impulsive form. A bearish bias is warranted against 105.70.
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STRATEGY: Bearish, against 105.70, target TBD
Our alternate count is beginning to look better than the favored. We had favored the idea that the GBPUSD was entering a 3rd wave decline (of C). However, if this count were correct, then the GBPUSD should have accelerated lower by now. Over the last 2 months, the pair has gone sideways and it is more likely that this serves to build a bullish base that will lead to a rally through 2.04. The decline to 1.9599 was likely an X wave.
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STRATEGY: Exit Shorts
We favor the upside and are presenting a short term count this morning. If a C wave is unfolding from .9887, then there is likely one more leg higher that will unfold. Look for support near 1.0330 (Fibo and structural support) in the coming days.
We remain USDCAD bulls (notice that we omitted aggressive though) as advances since the .9055 low are in 5 waves and declines are in 3 waves. Near term, price should remain above 1.0037 and we will not even think about an objective until the pair has exceeded 1.0324. Coming under 1.0037 would cause us to reassess the situation.
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STRATEGY: Bullish, against 1.0037, target above 1.0324
Longer term, the AUDUSD is in the process of forming a major multi year top but that top is not confirmed yet. We view the advance from the 2001 low as an A-B-C advance. The rally from the 2004 low at .6771 is wave C. The rally through the November 2007 high at .9400 satisfies minimum expectations for wave 5 of C from .8512. The longer term implications are that a multi-year top will form (possibly has already formed) and the AUDUSD will decline significantly.
The rally through .7879 negates our short term bearish bias. Similar to the AUDUSD, we expect a long term top to form (may have already formed in the NZDUSD but the short term pattern is unclear and does not confirm this suspicion).
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[1] STRATEGY is a summary of our best technical ideas. The ideas are subjective and are subject to change everyday although trades are typically held for at least a few days and sometimes a few weeks or more. Ideas are also included for crosses throughout the week; these are published at separate articles at DailyFX.