Euro Commodity Crosses Headed Higher


[B]Commentary[/B] - We wrote last week that “the rally from 1.4121 was the first leg of a larger correction. The decline from 1.4592 was the b wave of the correction and a break above 1.4592 would satisfy minimum expectations for the end of the correction. We are looking for a spike through 1.4592 and for a test of the 38.2% of 1.4122-1.4717 before the next leg down begins.” The EURCAD did spike through 1.4592 and traded to 1.4643 before moving lower. A test of 1.4717 remains possible. The pattern is not too clear right now so we are refraining from taking a strong stand.
[B]Strategy [/B]- Flat

[B]Commentary[/B] - We wrote last week that “we are looking for strength to persist until 1.6088. Resistance should be solid there and a rejection there presents an opportunity to return to the bearish side.” Price has traded to this level but additional upside potential remains. A flat correction either ended at 1.5917 or a triangle is unfolding from the 7/30 high of 1.6154. Both patterns are bullish and we expect at least one more leg higher. A break above 1.6164 exposes the 61.8% of 1.7033-1.5473 at 1.6437. This is also a former congestion area.
[B]Strategy[/B] - Bullish against 1.5915, targeting 1.6400

[B]Commentary[/B] - We wrote last week that “the EURNZD is close to testing channel resistance, close to 1.7840. Look for resistance to hold on a daily closing basis. A daily close above this line would be a bullish signal and give scope to a test of the May high at 1.8582.” Price did close above this line and our working assumption is that price is headed back to 1.8582.
[B]Strategy [/B]- Bullish against 1.7719, target 1.8500