- Euro to 1.4000 but Upside Potential is Limited
- Japanese Yen Breaks from Consolidation
- British Pound Bearish Cycle Underway
- Swiss Franc Same as Euro (Inverse)
- Canadian Dollar to Parity?
- Australian Dollar 5 Wave Advance
- New Zealand Dollar Breaks Through Resistance
SEE A DECRIPTION AT THE BOTTOM OF THIS REPORT FOR JTRENDW AND JTRENDD
Commentary: We wrote yesterday that considering that the 23.6% of wave 3 (1.3551-1.3928) is at 1.3839, it is possible that the correction is complete at 1.3828. For this reason, a bullish bias is warranted against 1.3719 (top of wave 1) for a test of 1.4000. As wave 5 unfolds, we will be able to better gauge where it might end. Wave 5 is indeed underway from 1.3828 and is appears that one more high (above 1.3988) is required before a more significant top is in place. This 15 minute chart shows the strucutre of wave 5 from 1.3828 and suggests that it is close to complete. A rally above 1.3988 satisfies minimum expectations for the end of wave 5.
Strategy: Remain bullish, move risk to 1.3828 (from 1.3719), target 1.3988
Commentary: The USDJPY continues to play out as expected. We wrote yesterday that a USDJPY rally should accelerate soon and the scenario that we described last week should play out. That scenario describes a flat ending at 112.59 as wave b of 2 in an a-b-c correction from 111.59. Wave c is now underway towards the 100% extension of 111.59-117.12/112.59 at 118.12 (this is also close to the 50% of 124.13-111.59 at 117.86). A rally to 118.12 would complete larger wave 2 within the 5 wave bearish sequence from 124.13 and give way to the next leg lower.
Strategy: Remain bullish, against 112.59, target 118.00
Commentary: We wrote yesterday that the count that we favor treats the rally from 1.9879 as wave 4 in a 5 wave bear cycle from 2.0366. Resistance is at 2.0010/27 (38.2% of 2.0025-1.9878 and former 4th wave). Cable barreled through the 2.0010/2.0027 resistance to trade above 2.0150 yesterday afternoon before rolling over at 2.0172. Still, there is no overlap with waves 1 and 4 so the rally from 1.9879 can be counted as a 4th wave. A drop below 1.9879 would complete 5 waves down from 2.0366 and give scope to a corrective rally.
Strategy: Flat
Commentary: We were not confident in the bear side yesterday but did write that as long as price is below 1.1922, a cautious bearish bias is warranted against 1.1922, targeting a drop under 1.1801. The USDCHF is testing the 1.1800 figure yet again this morning. However, the decline from 1.1922 may be in its 5th wave. A drop below 1.1793 would potentially complete 5 waves from 1.1922 and give way to either a corrective rally or an outright reversal. Remember that the larger pattern has the USDCHF thrusting lower from a triangle and thrusts from triangles are terminal.
Strategy: Flat
Commentary: Near term, the USDCAD may have started tracing out a 4th wave correction from 1.0081. A potential terminus for wave 4 is the 23.6% of 1.0592-1.0081 at 1.0202. This means that lower prices lie ahead but not before additional consolidation. Bigger picture, 1.0071 is the lowest that the USDCAD can go if the long term ending diagonal from 1.4000 is to remain intact. See yesterdays analysis for the diagonal analysis.
Strategy: Flat
Commentary: We wrote yesterday that a bearish stance is warranted against .8459 but the Kiwi structure looks very bullish, so be careful with the Aussie. The bearish bias was proved wrong as the Aussie traded through .8459 to .8550 this morning. Near term, a 5 wave rally is complete from .8274 and a corrective setback is unfolding now. Look for a setback to end in the Fibo zone of .8380-.8444 (61.8%-38.2% of .8274-.8550) before the next advance.
Strategy: Flat
Commentary: The Kiwi structure is unfolding as expected. We wrote yesterday that a correction is likely complete at .7005 and we expect the rally to accelerate in the next few hours in a 3rd wave. The rally accelerated and the pair has exceeded the wave a high of .7272. Bullish objectives are the 100% ext. of .6639-.7272/.6824 at .7456 and the 61.8% of .8108-.6639 at .7547. Near term support is at .7227.
Strategy: Remain bullish, move risk to .7005 (from .6824), target .7456-.7547
JTRENDW uses 13 week RSI in order to gauge strength of trend. The trend is considered Bullish if the indicator registers a reading above 60. The trend is considered Bearish if the indicator registers a reading below 40. If the reading is between 40 and 60, then the reading is Flat. The JTRENDD uses 13 days of data. An example of JTRENDW is below for the EURUSD.
