The EURUSD came within pips of 1.55 this morning and the short term wave structure suggests that the top may in place. If a top is in place, then the next move is back towards the January low near 1.44.
The entire rally from 1.4438 could be complete at 1.5460. Wave 5 exceeded where it would equal wave 1 at 1.5462. It is possible that wave 5 extends closer to where wave 5 would equal 61.8% of waves 1 through 3 at 1.5635 but wave 5 would consist of 5 waves up if counted from 1.5143. This [I]suggests[/I] that a major top is close at hand. As always, 5 waves down from 1.5460 would signal that a top is in place.
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We are sticking with our assessment that a 5 wave drop from 108.35 may be complete at 101.40. This does not change the long term bearish call for the pair to test the 1995 low near 80, but it does suggest that at least a correction is due; possibly all the way back to 104. Under this count, the up, down sequence from 101.40 is wave a and b within the a-b-c correction.
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STRATEGY: Bullish, against 101.40, target near 104.00
The rally from 1.9361 is wave C within the A-B-C advance from 1.9337. Wave C should divide into 5 waves and so far there are only 3 waves up. As such, we expect additional gains. The next likely resistance point is the 61.8% at 2.0663. We wrote yesterday to “look for support in the 2.0028/2.0100 zone.” The low yesterday was at 2.0045 so look for Cable to rally. A drop below 2.0045 would not destroy the bullish bias. Coming under 1.9946 would suggest that a major top is in place.
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The drop from 1.1103 (wave 3 within the 5 wave drop from 1.1591) is complete as there are 5 waves down. Look for a correction to reach 1.0458 over the next few weeks. Waves a and b of the a-b-c advance appear complete and wave c should reach close to 1.0400.
STRATEGY: Bullish, against 1.0134, target 1.0390
We maintain a bearish bias against 1.0197. It is possible that a top is in at .9981 but a push through there would expose the 61.8% and 78.6% Fibo levels at 1.0011 and 1.0093. The two scenarios are outlined on the chart.
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STRATEGY: Bearish, against 1.0197, target TBD
We still maintain that the drop from .9496 is wave 4 within the 5 wave bull cycle from .8512. A drop below .9147 may be required in order to complete wave 4. It is also possible that the decline is complete as a double zigzag. Those that are willing can get long against .8874 in order to prepare for the run to 1.00 (or close to it).
[B]Since the top in July at .8108, we contend that the NZDUSD is tracing out a large expanded flat. Wave B of the flat could test .8504 (127% of A) or .7634/69 (100% extension of a within B and 138.2% of A). The rally from .7874 is an impulse, which warrants a bullish bias. [/B]
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[B]STRATEGY: Bullish, against .7874, target TBD[/B]
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Tell us what you think about this report: contact the strategist about the article at <[email protected]>[/B]
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[1] STRATEGY is a quick summary of our best technical ideas. The ideas are subjective and are subject to change everyday although trades are typically held for at least a few days and sometimes a few weeks or more. Ideas are also included for crosses throughout the week; these are published at separate articles at DailyFX.