[B]• Euro Could Still See 1.5000
• Japanese Yen Correction
• British Pound Choppy Action Unclear
• Swiss Franc Same as Euro
• Canadian Dollar Double Zigzag
• Australian Dollar Big Top?
• New Zealand Triangle as Wave B[/B]
Commentary: We wrote last week that “bullish objectives are at 1.4912 and 1.4955. In summary, the EURUSD is likely to drop below 1.4800 before wave v challenges the mentioned objectives (1.4912/55). “ After rallying to 1.4966 on Friday, the EURUSD fell nearly 200 points. Still, it is possible that the drop completed wave iv of 5 and that one more high (and maybe a test of 1.500) will be registered before a more meaningful top is in place. Coming under 1.4723 would suggest that a top is in place at 1.4966.
Strategy: Flat
Commentary: Last week, we wrote that “aAs long as price is below 110.58, the favored count places the pair in wave iii of 5. There are objectives concentrated in the 108.00-108.50 range, which is fairly close. JPY pairs though have a tendency to extend in 5th waves so lower levels (and quickly) are a very real possibility. In fact, within the 5 wave bear cycle from 124.13, wave 5 would equal wave 1 at 107.07.” Wave 3 within the bear cycle from 111.74 ended at 107.54 and the bounce to 108.76 may have completed wave 4. One more low is expected before a larger recovery. A drop below 107.54 may also complete a 5 wave decline from 124.13.
Strategy:Flat
Commentary: As has been the case for some time, the short term pattern in Cable is not too clear. 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 i of 3 and the up (to 2.0617) down (to 2.0353), up sequence is an expanded flat in wave ii of 3. If this count is correct, then price should remain capped near the confluence of the 61.8% of 2.0844-2.0504 / 11/14 reaction high at 2.0714/32. Wave iii of 3 would be next so under this count the decline will accelerate soon.
Strategy: Bearish, against 2.0844, target TBD (much lower)
Commentary: The USDCHF is in a 5th wave (like the EURUSD) and the recent rally may have been wave iv of 5. As such, one more low is expected before a more meaningful turn. Keep in mind though that recent COT data argues for a turn towards CHF weakness (USDCHF strength). A rally through 1.1176 would argue that a low is already in place.
Strategy: Flat
Commentary: We maintain that “a big double zigzag is unfolding from the 11/7 low of .905 and that the triangle from last week fits nicely as wave b of the second zigzag. As such, wave C of the zigzag should be underway soon and take price close to where the second zigzag (from .9510) equals the first zigzag (.9055-.9724). This objective is at 1.0179.”
Strategy: Bullush, against .9703, target 1.0150
Commentary: We are presenting the longer term count since it is possible that the AUDUSD is at a major turning point. From the June 2004 low at .6772, the pair may have completed an ending diagonal as wave 5 of the larger wave 5 bull cycle that began in March 2001. Under this count, a top of significant proportion is in at .9399 and the Aussie is likely to work its way back to at least .6772 in the coming months.
Strategy: Bearish, against .8951, target TBD
Commentary: The Kiwi has been stuck in a range and based on the pattern that might be developing, this could remain the case. A triangle may be unfolding as wave B within a large A-B-C decline from .7891. Under a triangle interpretation, price is likely to remain in a range for the next day or two before a drop ends near .7364.
Strategy: Bearish, against .7675, target TBD
