Keep things in perspective. As much volatility as there has been in recent days, the EURUSD and GBPUSD have still failed to break the support levels that define the bull trend. Could it happen? Sure. But it has not yet, therefore a bullish bias is warranted with those two pairs.
The bullish count that has been preferred is in black lettering and the alternate count is in red. We have favored the bullish count for a number of reasons but the biggest is that COT positioning is very EURO bullish and USD bearish at this point. As long as price is above 1.5364, the bullish count is favored. A drop below there triggers the alternate bearish count.
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STRATEGY: Bullish, against 1.5364, target above 1.5834
The USDJPY rally has gone through 107.20 so we need to look at other counts. One decline treats the drop from 124.13-95.72 as a W-X-Y decline (7 waves, which is corrective). However, it is not clear where this fits in the larger pattern (take a look at the monthly, and it is quite clear that the USDJPY has broken from a 4th wave bearish triangle). The other count is that the decline from 124.13 is a leading diagonal. In Elliott Wave Principle, it is stated that second waves following a leading diagonal often retrace 78.6% of the diagonal. Therefore, both counts suggest strength until 113/118 (roughly the 61.8% to 78.6%). The next short term move could be down in a b wave though (assuming that the advance from 95.72 is wave a). This sets up a near term bearish stance, then probably a flip to bullish in a few months for wave c.
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We still remain bullish against 1.9461 due to both longer term and shorter term patterns. Since 1.9337 (the 1/22 low), the GBPUSD is tracing out either a flat or a triangle as large wave B within an A-B-C correction from 2.1160. We feel that 1.9461 will hold because the short term pattern (since the 5/14 low at 1.9364) counts well as a series of 1st and 2nd waves. Thus, the strongest part of the rally (wave 3 of 3) should be underway now. The strong demand this morning ahead of 1.9461 bolsters this view.
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STRATEGY: Bullish, against 1.9461, target above 1.9850 (likely near 2.02)
“There is little doubt that the advance from .9647 is corrective because a triangle separates the two legs. The only question is whether or not the rally from .9647 is a complete 3 wave rally or just the first wave of a larger more complex correction. Regardless, a bearish bias is warranted against 1.0527.”
STRATEGY: Bearish, against 1.0527, target below .9647
The minimum objective that we have cited for some time is above 1.0324. However, the alternate (in red) commands a good deal of respect in this case given the USD bearish bias in the other pairs (alternate here is a triangle). This is why we mentioned the last few days to “think about taking some longs off of the table near 1.02.” There is no change to this strategy. In the case of the triangle, the rally from .9818 would be wave D of the triangle (to be followed by wave E lower and then a bullish breakout).
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STRATEGY: Bullish, against .9967, target above 1.0324 (but lighten up on longs ahead of 1.0324 resistance)
The AUDUSD is slipping below the trendline that has held since late January but there is no sign of a reversal as the decline is more of a consolidation. With this in mind, a continuation of the advance is likely. “The rally from .8952 is wave C of a large 5th wave diagonal that could extend to a measured objective just below 1.00 in coming weeks (.9936).” Not until we see a 5 down or a drop below .9273 would we consider adopting a bearish bias.
This is the long term count that we have been following. The implications are that the NZDUSD has just entered a large C wave decline that will eventually come under .5927. The problem is that the decline since .8215 does not look impulsive. 1st waves often are tricky to count so it is possible. We’ll look for opportunities to sell below .7921 in the weeks ahead.
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