We wrote last week that “a 3rd wave advance is most likely complete at .8097. The .81 level is round number resistance and Thursday’s top occurred right at a nearly 7 month resistance line. Expect the EURGBP to reach at least .7762 in the coming months (23.6% of .6679-.8097) and possibly the 38.2% at .7555.” The pair is off over 200 pips since last Monday and we expect the decline to continue into the mentioned levels. The second wave of the same degree was flat, therefore this decline should be sharp (probably a zigzag). Look for resistance at .7906. The bearish bias is intact as long as price is below .8050.
We wrote last week that “an important secondary top may be in place. If price does exceed 1.6163, then expect resistance at 1.6253.” The EURCHF exceeded 1.6163 and is testing the mentioned 1.6253 (61.8% of 1.6827-1.5326 and former 4th wave extreme) now. We expect a top to form and for the EURCHF decline to resume from near current levels.
The EURCAD is tracking our preferred count. “5 waves up from 1.4410 makes it clear that the larger trend is up but a countertrend correction is probably still in progress. Expect the EURCAD to come under 1.5702 and test the 1.5633/1.5593 zone. Wave C would equal wave A at 1.5633 and 1.5593 is the 38.2% of 1.4410-1.6324.” Look for a bottom near 1.5600.
Last week we mentioned that “the EURAUD needs to drop below 1.6743 before we can proclaim that the correction from 1.7253 is complete.” Look for support near the 61.8% of 1.5922-1.7253 at 1.6431. The pair is considered to be in the early stages of a long term (multi month and maybe even multi year) bull trend as long as price is above 1.5922. As such, reward/risk on the long side is significant.
Similar to the EURAUD, the long term EURNZD picture is extremely bullish. Price is expected to eventually exceed 2.1187. Near term, expect a dip to the 1.9623-1.9466 zone for an opportunity to get bullish against 1.8957.
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[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