[B]• Euro Correting to at least 1.4500
• Japanese Yen Breaking Out?
• British Pound Correcting Back to at least 2.0850
• Swiss Franc Back to 1.1350/1.1400
• Canadian Dollar .9750 a Clear Objective
• Australian Dollar To Come Under .9106
• New Zealand Dollar Correction or Impulse?[/B]
Commentary: We wrote yesterday that “a slight new high (above 1.4731) can not be ruled out before the larger correction takes place but to expect a 4th wave correction that could reach 1.4434 before a new high in wave 5.” That small correction may be underway now as the pair has traded down from 1.4751. Still, the next good opportunity comes on buying the expected wave 4 dip near 1.4500, for a run to 1.5000.
Strategy: Flat
Commentary: “The 161.8% extension of 117.92-113.24/115.89 is at 108.30, which is an initial bearish objective. Coming under 111.59 reinforces the bearish bias.” We wrote yesterday that “a small 4th wave (of larger 3) may be unfolding. The corrective rally should be near its terminus as the rally has reached the 38.2% retrace of wave iii and a former congestion area at 113.39.” The top yesterday was at 113.37 and the USDJPY finds itself over 200 pips lower now. Expect a larger 4th wave correction before the drop to the 108.00 area.
Strategy: Take profit here (we’ll look to short again on a wave 4 bounce)
Commentary: Is this a top of significant proportion? We wrote yesterday that the “resistance line from the longer term bull channel is just above 2.1100 and that our objective was at 2.1240 (Fibo extension). This could be just a large wave 4 correction, but we still expect a decline to the confluence of the 38.2% / former congestion area near 2.0800 (2.0817 to be exact). Wave 5 potential would then come to the forefront, and lead to a test of the Fibo target at 2.1240 (and maybe higher).
Strategy: Get bearish near 2.1039, against 2.1160, target 2.0850
Commentary: The USDCHF is in the same exact position as the EURUSD (but inverse). A third wave is either over at 1.1188 or close to over and a 4th wave correction is unfolding now towards Fibo resistance at 1.1328/1.1415 (23.6-38.2% of 1.1785-1.1257). A new low in wave 5 is expected to complete the larger decline following this corrective advance.
Strategy: Flat (bearish objective hit at 1.1350)
Commentary: We maintain that a large correction is unfolding in the 4th wave position towards the confluence of the 38.2% of 1.0866-.9055 / former congestion near .9750 before the USDCAD reverses and drops below .9000. A more bullish reversal may be unfolding though. Still, the .9750 area should provide some resistance. The advance from .9236 is either a 3rd wave or wave c of a correction.
Strategy: Bullish against .9236, target .9750
Commentary: We wrote yesterday that “with the rally from .9106-.9400 in just 3 waves and with the decline from .9400 appearing impulsive, evidence favors labeling the down, up, down sequence from .9342-.9106-.9400 as an expanded flat, with wave C of that flat currently in progress. As such, it is our contention that price will drop below .9106 before the Aussie finds good demand.” The pattern is unfolding as expected so favor the downside until at least a break below .9106.
Strategy: Bearish, move risk to .9329 (from .9400), target TBD (below .9106)
Commentary: Kiwi looks rather bearish now and we mentioned yesterday that we were nervous about the bullish stance with this pair because of the clear bearish pattern that was unfolding in the Aussie. The decline from .7891 is unfolding as either an a-b-c or the beginning of an impulse. Either way, expect a drop below .7663 and test of .7592 (where c = a).
Strategy: Flat