A major correction is underway in the EURGBP will begin soon. The rally from .6535 (January 2007 low) is in its 5th and final wave. An objective for the end to the 5 wave rally from .6535 is .8053. This is where the rally from .7391 (wave 5) is equal to 61.8% of waves 1 through 3. A resisting trendline, drawn off of the September 2007 and January 2008 highs is at .8117 today and increases about 2 pips per day. In summary, the EURGBP should top within the next 2 weeks.
The rally from 1.5326 will likely reach at least 1.6075-1.6253 (50% to 61.8% of 1.6827-1.5326). One possibility is that the rally from 1.5326 is unfolding as a double zigzag. The second zigzag would equal the first at 1.6102; which is close to the 50% level. In summary, the short term trend is bullish as long as price is above 1.5653, and resistance should be strong near 1.61.
A countertrend decline may be complete at 1.5702. The decline did not reach the 38.2% at 1.5593 as we thought that it would but the drop is best counted as 3 waves, which is most important. A bullish bias is warranted against 1.5702 and near term support is at 1.5988.
As long as price is above 1.6743 (red line), we are treating the rally from 1.6743 as wave 1 of larger 3 (within the 5 wave rally from the October low at 1.5491). If the EURAUD comes under 1.6743, then a larger expanded flat is unfolding and we would look for resistance near 1.6470 (black line).
The EURNZD is testing the September 2007 high at 2.0185. A break through this level would confirm that wave iii within the 5 wave advance from 1.7029 is underway. The long term structure is bullish as long as price is above 1.8188. Near term support is at 1.9237 and 1.8960.
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[B] [B]TREND ANALYSIS[/B] is based on a rolling pivot model. LONG TERM TREND is determined by the last 3 months of price data (high, low, close). SHORT TERM TREND is determined by the last 4 weeks of price data (high, low, close). R3, R2, R1, PL, PH, S1, S2, and S3 are provided to aid in identifying entries and exits. These are objective measures and our subjective analysis (STRATEGY) may differ.
[B]SCHEDULE[/B]
Monday: EURGBP, EURCHF, EURCAD, EURAUD, EURNZD
Tuesday: EURJPY, GBPJPY, CHFJPY, CADJPY, AUDJPY, NZDJPY
Wednesday: GBPCHF, GBPCAD, GBPAUD, GBPNZD
Thursday: AUDCHF, AUDCAD, AUDNZD
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