Commentary - The rally from 162.16 is the beginning of a 5th wave that will lead to a major reversal in coming weeks. A projection for the end of wave 5 (and the entire rally from 150.73 for that matter) is where wave 5 would equal wave 1 - at 166.02. Bearish divergence with daily and weekly (and overbought) oscillators warn that the rally is tired. On a larger scale, the COT reports that speculators are extremely long Euros and extremely short Yen - in other words, conditions are ripe for a reversal. In summary, we are looking for signs of a reversal, but this rally could carry to 166.00 before that happens. The weekly chart is above.
Strategy - None
Commentary - The EURCHF is similar to the EURJPY in that 5 waves up are are close to complete. We wrote last week that “we can expect a choppy move higher before a reversal. Watch the channel forming since April 12th (below on chart). The EURCHF will likely reverse near the top side of this channel.” The EURCHF has reversed from the top of the channel but this decline is probably just a 4th wave decline that has bottomed. The 5th wave higher is underway now to complete the ending diagonal. A measured objective for the end of the advance is where wave 1 will equal wave 5 at 1.6675.
Strategy - Bullish against 1.6475 targeting 1.6613
Commentary - The 5 wave rally from .6535 to .6867 (late4 January-early March) indicates that the larger trend is bullish but the next leg up has not started yet. A larger flat correction appears to be unfolding from .6867. The C leg of the correction would equal the A leg at .6737. We are looking for a bottom near there.
Strategy - None