-EURUSD direction not entirely clear
-GBPUSD bearish pattern; new trade
-AUDUSD and NZDUSD topping / maybe topped
-Yen crosss expected to retrace
-EURCAD long trade
[B]EURO / US DOLLAR[/B]
[B]Classical Outlook: [/B]The market is starting to show signs of rolling over after breaking below the neckline of an hourly Head & Shoulders topping formation that could project setbacks towards 1.3300 over the coming sessions. Ultimately however, we still see scope for additional upside before the next major USD bull run and prefer to look to buy on dips in anticipation of a break above 1.3740. The 200-Day SMA comes in the low 1.3400’s as well which should strengthen case for solid support zone on dips to the 1.3300-1.3400 area. [B]Elliott Wave Outlook: [/B]Weakness at the end of the week was expected and there is a bullish count above 1.3250 but there is just as probable a bearish count against 1.3720. The bearish count is a triangle / flat within the corrective rally from 1.2510. Staying beneath 1.3614 keeps the short term trend pointed lower. Clarity is lacking and there will be much a better opportunity in the future.
[B]
BRITISH POUND / US DOLLAR[/B]
[B]Classical Outlook: [/B]Market price action remains extremely choppy with the pair failing to show any follow through from previous daily momentum. Since last Wednesday, it has been up-down-up-down-up-down-up-down. We retain a mildly bullish bias and given the proximity to the 2009 highs from early January, we see no reason why this level won’t be tested over the coming sessions. A break back below 1.5060 will however delay the recovery structure. [B]Elliott Wave Outlook: [/B]The short term trend is bearish against the recent high (1.5350) and weakness is expected down to Fibonacci support near 1.4750. Further out, there is the possibility of a new high on the year in order to complete a 4th wave from 1.3500.
[B]
AUSTRALIAN DOLLAR / US DOLLAR[/B]
[B]Classical Outlook: [/B]The market is starting to look a little heavy with the pair gradually easing lower since posting fresh 2009 highs by 0.7715 on May 11. Look for a break below 0.7465 to accelerate declines and open a more significant drop over the coming days back towards the 0.7240-0.7335 area. Back above 0.7625 is now required to take the pressure off of the downside. [B]Elliott Wave Outlook:[/B] I am expecting a significant top to form but have my doubts as to whether or not .7720 is that top. For one, an RSI extreme correlated with the price extreme on the 240 minute chart (tops almost always occur with momentum divergence). Structure is bullish against .7245. A drop below there would signal a bearish opportunity.
[B]
NEW ZEALAND DOLLAR / US DOLLAR[/B]
[B]Classical Outlook: [/B]The market has retraced back to the 200-Day SMA thus far since rallying to fresh 2009 highs by 0.6130 on May 11. However, with the pair well capped above 0.6000 over the past several months, the latest short-term pullback could be warning of the start to a more significant decline over the coming weeks back to the trend lows below 0.5000. At a minimum, we could be looking for a move back towards 0.5485 over the coming days. Above 0.6000 negates. [B]Elliott Wave Outlook: [/B]The NZDUSD may have completed an A-B-C zigzag rally this week (from the low earlier in the year). For one, price reversed at a former 4th wave (Elliott guideline) and there is daily RSI divergence at the high. However, short term structure is bullish above .5738 (much like the AUDUSD). A drop below there would signal an opportunity.
[B]
US DOLLAR / JAPANESE YEN[/B]
[B]Classical Outlook: [/B]Continues to extend declines and has now broken back below psychological barriers by 95.00. While scope exists for additional setbacks over the coming days, we see pullbacks limited to the 93.55-94.15 area. Below 93.15 however will open the door for a more considerable drop potentially back towards the key longer-term trend lows by 87.15. Above 96.20 is now required to take pressure off of the downside. It is also worth noting that the pair is currently testing the bottom of the Ichimoku cloud. [B]Elliott Wave Outlook: [/B]The long term trend remains down and I expect a resumption of that trend although there is near term upside potential. The pair has carved out a potential head and shoulders since the March top. A triangle count remains valid (circled area). Coming beneath 93.50 would eliminate the triangle count.
[B]
US DOLLAR / CANADIAN DOLLAR[/B]
[B]Classical Outlook: [/B]The latest rebound in the pair out from the 1.1475 trend lows has been impressive, but a closer look at the weekly chart still shows the market trading in a downtrend, with a break back above 1.1955 required to take the medium-term pressure off of the downside. Bears will be looking to sell into the current rally with a weekly lower top sought out below 1.2000 ahead of the next downside extension. Bulls however can find comfort in the longer term range base that has more or less held by the 1.1500 area from November 2008. [B]Elliott Wave Outlook: [/B]Structurally, the USDCAD decline from 1.3068 does not look complete. The advance from 1.1475 is overlapping (corrective) and suggests a new low. Watch for resistance from Fibonacci, which begins at 1.1869.
[B]
US DOLLAR / SWISS FRANC[/B]
[B]Classical Outlook: [/B]Some very interesting price action in the pair with all relevant moving averages coiling, a sign that we could be nearing a major breakout. Our bias is for a major upside break but we can not rule out the possibility for additional setbacks towards the 1.0865 area before the rally occurs. Any dips to 1.0865 over the coming sessions will be used as a buy opportunity. Price action has been extremely constructive on Friday but the market will need to break back above 1.1450 to officially take the pressure off of the downside. [B]Elliott Wave Outlook: [/B]Whereas the EURUSD has yet to exceed its March high of 1.3742, the USDCHF has already dropped below its March low of 1.1157. In other words, minimum expectations have been met for wave Y. So, it is [I]possible[/I] that a low is in place. Staying above 1.1037 keeps the short term trend pointed higher. There is potential support at 1.1135/80.
[B]
EURO / JAPANESE YEN[/B]
[B]Classical Outlook: [/B]A strong bearish outside week officially puts the pressure back on the downside and delays any hopes for a more medium-term base. Next key support comes in by 124.40 and we look for this level to be tested over the coming days. A break back above 135.00 will now be required to put the focus back on the upside. [B]Elliott Wave Outlook: [/B]5 waves down from 137.46 is bearish and suggests that the long term trend is down. However, the decline could be wave C of an expanded flat or part of a triangle. Intraday momentum studies are divergent at the recent low, which warns of at least a short term advance. A rally would present a short opportunity against 134.86. There is potential resistance at 131.20.
[B]
EURO / BRITISH POUND[/B]
[B]Classical Outlook: [/B]While our overall bias is for a much lower cross rate over the coming months, price action at current levels does not warrant any sell recommendations. The market seems content on chopping around for the time being before considering a more significant move. Rallies back above the 100-Day SMA towards the 0.9100 area should not be ruled out and we will look to sell on an approach to this level. Back under 0.8765 is required to open fresh drop. [B]Elliott Wave Outlook:[/B] It is possible that a triangle is unfolding. This would define the near term trend as bullish in wave D of the triangle up towards .9250.
[B]
EURO / CANADIAN DOLLAR[/B]
[B]Classical Outlook: [/B]We had been recommending to establish long positions on dips towards 1.5500 in previous weeks, and this strategy has proved rewarding after setbacks on the cross stalled just below 1.5500. A bullish reversal week has now carved its way out and scope exists for more significant upside back towards the 1.6500 area over the coming weeks. Only back under 1.5635 gives reason for pause, with a weekly higher low now sought out by this level, to be confirmed on a break back above 1.6010. [B]Elliott Wave Outlook: [/B]I wrote the last 2 weeks that “the decline from 1.6983 a C wave impulse that will end beneath 1.5633. A drop below there would expose Fibonacci support at 1.5359. There should be a buying opportunity against a higher low in the next few weeks.” That buying opportunity is here.
[B]
TRADE LIST[/B]
*Entry prices for trades that are recommended ‘at market’ are listed as the close price on the date published.