[B]• Euro Testing Critical Support
• Japanese Yen To Test at least 109.50
• British Pound Bearish Below 2.0831
• Swiss Franc 5th Wave Extending
• Canadian Dollar Trendline At 1.0170
• Australian Dollar Range Persists
• New Zealand To Test .7800 Before Larger Decline[/B]
Commentary: The EURUSD has fallen as expected but we expect a bit more weakness and a test of at least the 23.6% of 1.3360-14967 at 1.4588. A dip to this level would complete wave 4 within the 5 wave bull cycle from 1.3261. A deeper correction, to the 38.2% at 1.4353 is also possible although bears will also have to contend with the 11/13 low at 1.4520.
Strategy: Bearishm, move risk to 1.4785 (from 1.4858), target 1.4520
Commentary: We wrote Friday that “the USDJPY rally is likely coming to an end near term. There are now 5 waves higher from 107.20, indicating that the USDJPY has more upside potential, but not before a corrective decline that likely sees at least 109.46.” After reversing at 111.22, the corrective decline that we mentioned is underway. Again, look for at least a decline to 109.46 and maybe 108.74 before the next leg higher.
Strategy: Flat
Commentary: As long as price is below 2.0831, the bias remains bearish. “The favored count treats the decline from 2.1160-2.0522 as larger wave 1 (or A) in a bear cycle with the rally to 2.0844 as wave 2 of the same degree. The decline to 2.0353 was wave 1 of 3 and the choppy rally from 2.0353 to 2.0831 can be counted as a triple zigzag, which fits as wave 2 of 3. Wave 3 of larger 3 appears as though it is underway now and downside potential is much greater.” The alternate count treats the decline from 2.1160 as the beginning of a large triangle or flat.
Strategy: Bearish, against 2.0831, target much lower
Commentary: A push through 1.1327 would complete an extended 5th wave within the 5 wave bull cycle from 1.0937. We expect a larger corrective setback to occur after a new high is registered to bring the USDCHF back to the 1.1100 area in either a 2nd wave or B wave. This would offer an opportunity to get bullish for the next advance.
Strategy: Flat
Commentary: Near term price action is choppy and unclear from an EW standpoint. On the daily chart, the rally from .9055 has retraced over 50% of the 1.0866-.9055 decline. The next level of potential resistance is the 9/26 high at 1.0095, then the confluence of the 61.8% of 1.0866-.9055 / trendline drawn off of the March and August highs at 1.0174.
Strategy: Flat
Commentary: There is no change to the AUDUSD pattern. “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.” However, keep in mind the longer term pattern we showed last week. That pattern argues for a top of significant proportion to form in the next few weeks.
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
