Euro Crosses Surge Higher


EURJPY – With EURJPY trading above the 2/23 high (159.61) today, the rally from 150.73 is most likely a 5th wave in the 5 wave bullish sequence that began in June 2005 at 130.60. The 5th wave has taken the form of an ending diagonal, which often lead to sharp reversals. Turning to the hourly chart, we see 5 waves complete in the 5th of the 5th, indicating that a turn is near. Coming under 158.00 would signal that the turn has occurred but the rally may very well extend higher. Potential resistance is at monthly R1 (159.98). Looking out even further, it is very possible that the EURJPY is nearing the end of a 5 wave rally that began in October 2000. Again, keep in mind that the pair can push higher but the 5 wave structures indicate that the risk of a reversal is high.

EURCHF – The EURCHF has broken through the 2/22 high at 1.6295. The strong portion of the rally from 1.6025 is most likely the 3rd of the 5th of wave. The EURCHF will likely consolidate in a 4th wave before rallying higher in a 5th wave and creating bearish divergence with daily oscillators. Support is clustered between 1.6278 and 1.6335. A level to watch for a potential reversal is the February 2000 high at 1.6495 (also the 161.8% extension of wave i).

EURGBP – The EURGBP is in wave 3 higher but may correct lower towards.6796 in a small correction before taking out the 3/19 high at .6867. The bullish structure remains intact as long as price is above .6748. A drop below there, while not expected, would shift focus to the 2/23 low at .6689.