The EURUSD pattern has cleared. The rally from 1.5303 to 1.5552 (last night’s high) is in 5 waves, which serves as wave i of the next 5 wave cycle. This action confirms our larger bullish bias.
There is little change to the larger structure but the very short term EURUSD pattern has resolved itself. Expectations are still for price to exceed 1.5843 in the next 3 to 4 weeks. Near term, the rally from 1.5303 to 1.5552 (last night’s high) is in 5 waves, which serves as wave i of the next 5 wave cycle. A small wave ii is underway now and should end in the 1.5400/50 zone (Fibo zone).
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STRATEGY: Get bullish near 1.5400/50, against 1.5300, target above 1.5843
The advance from 95.72 is most likely corrective, but there appears to be additional upside potential. The first leg of the correction (95.72-105.70) consists of overlapping waves and is the first wave of a 3 wave sequence. The advance has formed a channel and the upper end of the channel is not until the 111/112 area. Also, the wave from 102.58 would equal the 95.72-105.70 advance at 112.62. A push through 108.57 and a test of 109 is probable. At that point, there would be potential for at least a medium term top.
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Minimum expectations are for the advance from 1.9409 to continue until at least 1.9850. The rally from 1.9409 unfolded as an impulse, which inspires confidence in our bullish count. We wrote yesterday to “look for support near 1.9600/25. A short term correction should unfold in the next day or two. This will be the opportunity to get long.” A decline has commenced but it is unclear whether it will prove corrective. Given the count in the EURUSD, a bullish bias is warranted against 1.9409.
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STRATEGY: Get bullish near 1.96, against 1.9409, target above 1.9850
“There is little doubt that the advance from .9647 is corrective because a triangle separates the two legs. The only question is whether or not the rally from .9647 is a complete 3 wave rally or just the first wave of a larger more complex correction.” The down-up-down-up sequence since the 1.0624 top is most likely a series of 1st and 2nd waves. Expectations are for this decline to come under 1.0147 in a 3rd of a 3rd within the next week or two. A bearish bias is warranted against 1.0519.
STRATEGY: Bearish, against 1.0519, target below 1.0147
The USDCAD has consolidated in recent days but there is no change to the longer term count that calls for a push through 1.0324 and test of 1.05 and possibly 1.0866 (former major congestion). The alternate (in red) has yet to be disproved and is gaining traction with each day that the USDCAD fails to break higher. In the case of the triangle, the rally from .9818 would be wave D of the triangle and wave E lower is underway now. E waves are often sharp and deep so a drop below 1.00 is likely if a triangle is unfolding.
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STRATEGY: Bullish, against .9967, target above 1.0324 (but should be in a small position now since the triangle count is becoming more and more probable each day)
There is no sign of a reversal as the decline still counts better as a correction. “The rally from .8952 is wave C of a large 5th wave diagonal that could extend to a measured objective just below 1.00 in coming weeks (.9936).” Not until we see a 5 down or a drop below .9273 would we consider adopting a bearish bias. In fact, the very near term pattern is bullish as long as price is above .9333 (ideally above .9369).
STRATEGY: Bullish, against .9333, target TBD
We’ve altered the labeling slightly since yesterday. There are 5 waves down from .7921. This drop either completes a large C wave or is wave 1 of 3 in a longer term decline. Either way, the NZDUSD is expected to advance in the coming weeks and months, even if just correctively. The 50% of .7921-.7445 at .7683 is likely and the 61.8%-78.6% at .7740-.7920 is possible, especially since a rally to there would fill the 6/4 gap.
STRATEGY: Bullish, against .7445, target .768 and TBD
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