The Euro crosses are bullish on balance. The EURGBP may break higher from a triangle in the next few weeks and the EURAUD is nearing critical 1.74 resistance.
Since the April high (.8096), the EURGBP has been stuck in a triangle. Triangles are continuation patterns, so we expect a break to the upside before a major top forms. Those willing to position for a bullish break should keep risk to .7766.
The bullish EURCHF count remain favored. “The 1.5326-1.6376 rally is in 5 waves, therefore expectations are for a similar 5 wave rally to succeed the corrective decline from 1.6376.” A bullish bias is warranted against 1.5991. 1.6135 is the 61.8% of 1.5991-1.6368 and potential support. The 200 day SMA at 1.6175 reinforces support.
Longer term, there is no change to the call for a push through 1.6324. Near term, the rally from 1.5278 is not clearly impulsive and it is possible that price action since the March top at 1.6324 is unfolding as a triangle or flat. Expect the range to tighten going forward if a triangle is underway. As mentioned, a thrust through 1.6324 is still expected; the triangle just delays the move. Support is below 1.5663.
Last week, we wrote that “the EURAUD vaulted higher in a 3rd wave within what will be a 5 wave impulse from 1.6047 (and even a larger impulse from 1.5922). Expect a break above 1.7426 in the next few weeks.” There is no change to this call. Bulls should stay bullish and move risk to 1.6817.
There is no change to our long-standing bullish bias. The advance from the December 2005 low to the July 2006 high was in 5 waves and the decline that followed was in 3 waves. The EURNZD has exceeded the July 2006 high and the next long term objective is 2.33 (161.8% extension). Long term traders should keep risk at 2.0477 and sit tight with this trend since upside potential is significant. The near term trend is considered up as long as price is above the support line that is drawn off of the February and June lows.
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