Greenback Ranges as Yen Strength Returns

• Euro 1.3262 Must Hold For Bears
• Japanese Yen Turns Around
• British Pound 3 Wave Correction
• Swiss Franc Strengthens With Yen
• Canadian Dollar Testing 1.1700
• Australian Dollar Rolls Over
• New Zealand Dollar Big Range

EURUSD – The EURUSD continues to range primarily between 1.3100 and 1.3200. The pair appears to be working its way up to the confluence of the 61.8% of 1.3262-1.3072 / 3/7 high at 1.3188/89. If a 3 wave correction is unfolding from the 3/5 low at 1.3072, then the first and third legs of that correction would be equal at 1.3200. Additional resistance is from the 78.6% of 1.3262-1.3072 at 1.3221. The inability of bears to keep EURUSD sub 1.3150 limits confidence in the downside near term but 1.3186-1.3221 should be formidable resistance. 1.3262 must hold in order to maintain a bearish bias.

USDJPY – As mentioned here Friday, a rally to 117.63 / 118.00 (117.98 is where the rally from 116.20 would equal the 115.15-116.91 rally) would possibly complete a 4th wave correction and give way to another bout of weakness to below 115.15. The USDJPY tested 118.50 today but the bearish bias remains intact as long as 118.99 holds (as resistance).

GBPUSD – Cable has rolled over from the 50% of 1.9675-1.9182 at 1.9428. It is possible to count a 3 wave correction from 1.9182 as part of a larger 4th wave correction. What we are looking for then is a decline from near current levels to under 1.9182 in a 5th wave decline. A rally above 1.9436 could test the 61.8% of 1.9675-1.9428 at 1.9486.

USDCHF –The next move of consequence should be in a wave C rally (inverse of EURUSD) to above 1.2575. The push through Friday’s high at 1.2264 bolsters the bullish scenario. Former resistance at 1.2264 is now support and this morning’s decline is coming up on this level. 1.2264 needs to hold in order to keep the most bullish count intact. A decline below 1.2264 would cloud the picture and force a neutral bias.

USDCAD – The long term bearish bias remains intact. The decline off of the top of the 2 year channel combined with the outside monthly reversal favor the downside. Ultimately the decline from 1.1879 should come under 1.0927 to complete a 5th wave. The rally from 1.1564 has retraced 78.6% of the 1.1879-1.1564 decline in a 2nd wave. The next few weeks should see price come under 1.1564 and possibly even 1.1250-1.1326 – which marks the 138.2% to 161.8% extensions of 1.1879-1.1564 / 1.1761. 1.1880 is critical resistance. A push above, while not expected, targets the 1.2000 figure. The decline below 1.1731 grants confidence to the bearish case.

AUDUSD – The AUDUSD remains range bound between .7700 and .7950. However, the pair has stalled at the 61.8% of .7950-.7680 at .7846. The 20 day SMA at .7841 reinforces resistance at this juncture. A decline below .7798 warrants a bearish bias. If .7848 fails as resistance, then a rally could stretch to the 78.6% at .7892.

NZDUSD – Kiwi has also corrected recent weakness from .6720 in a 4th wave. The 78.6% at .6967 should be formidable resistance. The bearish structure remains intact as long as price remains below .6970. A decline below .6862 increases confidence in the bearish bias.