The EURGBP is nearing a significant top. The EURCHF has turned up from probably will be a multi-week low. Dips in the Euro / commodity crosses present longer term bullish opportunities.
The EURGBP is nearing the end of a 5 wave rally that began back in January 2007. When wave 3 is extended (as it clearly is here), waves 1 and 5 tend towards equality. In this case, wave 5 (from .7391) would equal wave 1 (.6535-.6867) at .7723. So, while the pair could rally a bit more, the next big move is lower in a large correction that probably lasts a few months at least.
We wrote last week that “the EURCHF drop from 1.6827 is in 5 waves, meaning that at least a countertrend rally is due. The rally probably reaches at least the former 4th wave extreme at 1.6230.” Short term support is at 1.5770. A bullish bias is warranted as long as price is above 1.5616.
We wrote last week that “our favored count for the EURCAD calls for a wave 3 of 3 (or C) rally to exceed 1.5200. An initial objective is not until 1.5906 (100% extension of 1.3285-1.5029/1.4162) but bullish potential is even greater.” The EURCAD has exceeded 1.5200 but there is no sign that the advance is complete. Expect a test of the mentioned 1.5906.
We wrote last week that “the advance from 1.5491 to 1.7159 is a clear 5 wave advance. A 3 wave (A-B-C) corrective decline will likely resolve itself in the next few weeks…the rally that ensues should exceed 1.7159 and may be the beginning of a much more significant multi-year rally. Ideally, price remains above 1.6117.” It is very likely that a wave 2 low is in place at 1.5922 and that a longer term EURAUD uptrend is underway. Price is expected to eventually exceed 1.7159 although bullish potential is much greater. Short term support is at 1.6430.
We wrote last week that “the pair is headed much higher in the coming weeks and months…above 2.0185 at minimum.” With a wave 2 (or B) low in place at 1.8188 and with the EURNZD breaking through the 200 day SMA, our confidence that a longer term bull trend is underway is high. Near term support is near 1.8800.
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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: EURJPY, GBPJPY, CHFJPY, CADJPY, AUDJPY, NZDJPY
Tuesday: EURGBP, EURCHF, EURCAD, EURAUD, EURNZD
Wednesday: GBPCHF, GBPCAD, GBPAUD, GBPNZD
Thursday: AUDCHF, AUDCAD, AUDNZD
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