[B]• Euro Bearish Near Term to at Least 1.4520
• Japanese Yen Small Wave 4 Correction Ending
• British Pound Triple Zigzag Correction Complete
• Swiss Franc 5 Waves Points Lower (USDCHF Higher)
• Canadian Dollar 5 Waves Points Higher (USDCAD Lower)
• Australian Dollar Bouncing From Support
• New Zealand Wave C Down to Begin Soon[/B]
Commentary: There is little change from yesteday’s commentary. We wrote yesterday that “the decline from 1.4967 has either completed the first leg of a flat correction (3 waves down to this point) or a more bearish structure is unfolding now and the decline from 1.4908 is wave 3 within a 5 wave bearish cycle from the top.” Both scenarios remain valid at this point but we favor the former corrective scenario. This treats the first 3 wave decline as wave A in a larger A-B-C correction. The more bearish count (in red) treats the decline from the top as a series of 1st and 2nd waves. Both counts are bearish and call for at least a return to 1.4520. The more bearish count would see price get to this level much quicker.
Strategy: Bearish against 1.4858, target 1.4520
Commentary: The USDJPY rally is unfolding as expected. The dip to 109.68 last night likely completed wave iv of either 3 or C. A rally through 110.48 would satisfy minimum expectations for the rally from 107.52. Targets for the end of the near term rally are 111.31 (where wave iv from 109.68 would equal wave i (107.52-109.15)). 111.30 happens to be the 38.2% of 117.93-107.20 as well.
Strategy: Bullish, move risk to 109.68 (from 108.26), target 111.20
Commentary: The bearish count that we presented yesterday treated the rally from 2.0353 as a double zigzag. That rally has changed into a triple zigzag. “Under the bearish count, the decline from 2.1160-2.0522 is wave 1 in a 5 wave bear cycle. The rally from 2.0522-2.0844 is wave 2. The decline from 2.0844-2.0504 is wave 1 of larger 3.” Again, the choppy rally from 2.0353 to 2.0831 can be counted as a triple zigzag, which fits as wave 2 of larger 3. Wave 3 of larger 3 may be about to begin now. If so, then price must remain below 2.0844 (preferably 2.0831) and the downside is much greater. Reward/risk favors bears.
Strategy: Get bearish near 2.0680, against 2.0831, target much lower
Commentary: We wrote yesterday that “the recent turn is either a correction in larger wave 4 within the 5 wave bear cycle from 1.2467 or is something more bullish. Either way, price is expected to challenge former congestion at 1.1300 in the next few weeks (if not sooner).” The USDCHF is already pressing against 1.1200 and the rally from 1.0886 is a beautiful 5 wave advance. 5 Waves higher indicates that the trend of the next larger degree is up so we should expect at least one more 5 wave rally, but not before a corrective setback. We will use this correction to get bullish.
Strategy: Flat
Commentary: We wrote yesterday that “the large double zigzag that we proposed may be complete. The USDCAD has run into resistance from former congeston (circled) and the 50% of 1.0866-.9055 at .9961.” A 5 wave decline is complete at .9835 and a setback is unfolding now as either larger wave 2 or B. The rally has stalled at the 50% of 1.0002-.9835. Potential resistance is at the 61.8% at .9936. The next leg lower should challenge .9700.
Strategy: Bearish against 1.0002, target .9710
Commentary: Near term, the decline from .9399 could be just an a-b-c decline. This is suggestive of a resumption of the uptrend and eventual rally through .9399. The other count is bearish and suggests that an a-b-c flat correction is unfolding from .8753. In either case, price is expected to exceed .9068.
Strategy: Bullish, against .8653, target TBD
Commentary: The large 5 wave advance from .6639-.7891 indicates that the larger trend is up but a larger correction is expected before a resumption of the uptrend. The decline from .7891 has yet to even reach the 38.2% level of the previous rally. As such, the decline from .7891-.7435 is most likely just wave A in a larger A-B-C decline. The current rally is wave B. Wave B could exceed .7891 in an expanded flat but we do expect price to eventually come under .7435 and test .7365 (10/22 low). Near term, it looks like at least one more high is required before price turns lower in wave C. A spike through .7760 could test the 78.6% of .7891-.7435 at .7794 before price rolls over.
Strategy: Flat
