· [B]Euro In For a Correction[/B]
· [B]Japanese Yen Impulse Rally[/B]
· [B]British[/B][B] Pound To Still See 1.9500[/B]
· [B]Swiss Franc Looks Strong[/B]
· [B]Canadian[/B][B] Dollar Will Trade In a Choppy Manner [/B]
· [B]Australian[/B][B] Dollar Headed Towards 1.0000 In Next Several Months[/B]
· [B]New Zealand[/B][B] Dollar Diverges From Aussie[/B]
[B][/B]
[B]SEE A DECRIPTION AT THE BOTTOM OF THIS REPORT FOR THE INDICATORS IN THE TABLE
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Commentary[/B]: Larger wave 4 is complete at 1.4310 and wave 1 of the next larger degree is close to complete at 1.4750. Wave 2 is likely to bring price back to the 1.4600 area (former 4th is at 1.4592). A deeper correction is possible since this decline is a second wave (and second waves are usually deep). The next leg higher will be a third wave and is expected to challenge 1.5200/1.5300 (but not before a dip to 1.4600). Be sure to check out the Elliott Wave forum for intraday updates to the count.
[B]Strategy[/B]: Exit bullish position
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[B]Commentary[/B]: We wrote on Thursday that “the USDJPY hit 114.65 today and has reversed lower in what could be the start of the next bearish leg in a 5 wave bear sequence that began at 117.93. A resistance line drawn off of the June and October highs supports a bearish bias.” The bearish bias remains intact at this point. One possibility is that a larger more complex correction is unfolding and that this decline is just wave X. Potential support is at 111.31 and 110.09 (100% and 161.8% extensions of 114.65-112.67/113.29).
[B]Strategy[/B]: Bearish, move risk to 113.29 (from 114.65), target 110.20
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[B]Commentary[/B]: Expect a top and reversal in the 2.0069-2.0166 area. This area is the 38.2%-50% level of 2.0576-1.9755. The rally from 1.9755 should complete wave iv of C within the A-B-C correction from 2.1160. We will be looking for a significant bottom to form in the 1.9500 area.
[B]Strategy[/B]: Bearish, against 2.0195, target 1.9530
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[B]Commentary[/B]: The USDCHF is in the exact same position as the EURUSD (but as the inverse). Wave 1 down is close to complete at 1.1226. Although a test of 1.1200 is possible, the next larger move will be in a wave 2 correction towards the 1.1400 area (much like the next EURUSD move is likely back to the 1.4600 area). This bounce will present the next bearish opportunity.
[B]Strategy[/B]: Exit bearish position
[B]Commentary[/B]: Near term, expect a bounce in small wave iv of A towards the 38.2% of 1.0140-.9746 at .9902. The USDCAD should roll over near this level and drop below .9755 in order to complete larger wave A from 1.0248. A larger wave B bounce is then expected. In summary, the USDCAD will likely trade in a choppy manner for the next several weeks.
[B]Strategy[/B]: Flat
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[B]Commentary[/B]: The correction from .9400 is complete and wave i of larger 5 is close to complete at .8825. We expect the next advance to exceed .9400 and possibly test 1.0000 in order to compete a large A-B-C advance of Cycle degree that began in 2001.
[B]Strategy[/B]: Bullish against .8549, target above .9400
[B]Commentary[/B]: We wrote last week that “wave i of C looks complete.7507. As such, a corrective setback to the .7671/.7773 zone (38.2% -61.8% of .7937-.7507) would offer a high probability short opportunity. “ The rally ended today at .7791 and the pair has come off nearly 100 pips. The bearish bias remain intact.
[B]Strategy[/B]: Bearish, against .7937, target below .7435