Euro Rejected at 1.3000
Japanese Yen Pairs Gains
British Pound Still Looks Bullish Short Term
Swiss Franc 1.2376 Bearish Pivot
Canadian Dollar going Nowhere Fast
Australian Dollar Ending Diagonal
New Zealand Dollar Possible Short Term Triangle
EURUSD We are still looking for a low to be made below 1.2865, which would be followed by a rally that will retrace a portion of the decline from 1.3367. Measured objectives are centered near 1.2750. The 61.8% extension of 1.3367-1.2865 / 1.3066 is at 1.2756 and the level where wave 5 would equal wave 1 is at 1.2747. Only a rally above 1.3066 (Fridays) high negates the near term bearish structure. Near term resistance is at the 61.8% of 1.3066-1.2912 at 1.3007. Remember that a decline below 1.2865 satisfies minimum expectations for a 5th wave down. The 200 day SMA is also potential support at 1.2824.
USDJPY The USDJPY appears to be tracing out a 3 wave zigzag correction. The decline from 122.21 to 120.10 would be the first of that 3 wave correction (wave A) and the bounce to 121.38 would be the second wave (wave B). A third wave (wave C) decline could extend to 119.26, which is where waves A and C would be equal. 119.26 is also the 38.2% of 114.43-122.21. Price closed below the 20 day SMA yesterday, which favors bears. 121.38 is critical resistance to the bearish case and the measured objective at 119.26. Price is currently just below a short term resistance line (see chart below).
GBPUSD We were looking for a C wave decline to 1.9316 but the impulsive rally from 1.9537 negated that interpretation. Instead, the rally from 1.9537 is taking on the look of a wave C that will challenge the 100% extension of 1.9482-1.9750 / 1.9537 at 1.9805. We maintain that the GBPUSD is nearing a major top. In fact, that top could be in place at 1.9915. The decline from 1.9915 could be the first of a 5 wave bearish sequence and this bounce, which would end near 1.9805 would be the 2nd wave. Near term support is at 1.9620.
USDCHF Due to the fact that we can count 5 waves up from 1.1880, it is possible that a countertrend move is already underway. The 5 wave rally from 1.1880 is likely the first wave of a larger 5 wave sequence thus the correction that is beginning now will be the second wave. Second waves often retrace a large portion of the first wave, so we are looking for a decline to extend towards the 61.8% of 1.1880-1.2575 at 1.2146. This level is also just above a series of lows from December and January. A decline below 1.2376 will be the first sign that this decline is underway. Price is very close to 1.2376 and the short term head and shoulders pattern suggests that a break is imminent. If 1.2575 is broken, then the bullish wave from 1.2376 is still progress.
USDCAD We have been calling for a major turn in the USDCAD to occur at or near the 1.618% extension of 1.0927-1.1456 / 1.1028 is at 1.1883. The pair reached 1.1873 on Friday and has turned down slightly. While there is no evidence that a turn has occurred yet, a break below the 1/25 low at 1.1731 would strongly suggests that a top is in place. Very short term resistance is yesterdays high at 1.1846 but 1.1873 needs to hold for the immediate bearish case to remain favored.
AUDUSD The short term structure in AUSDUSD is rather bearish. An a-b-c correction appears to have taken place from the 1/31 low at .7698. The c wave would be equal to the a wave at .7791, which also happens to be the 38.2% of .7941-.7698. Also, the c wave has unfolded as an ending diagonal, an inherently weak pattern that often gives way to a forceful decline. A decline below .7743 confirms the bearish bias.
NZDUSD Kiwi has bounced from where the .7038 decline equals the .7099-.6841 decline. As such, we are left with just a 3 wave correction of equal legs from .7099. This structure is suggestive of a bottoming in NZDUSD (as long as .6769 holds). A rally above .6868 grants confidence to the bullish case. On the other hand, the pair may be forming a short term triangle. In this case, we would favor a terminal decline to below .6769. .6868 needs to hold as resistance for the triangle to remain intact. (See yesterdays chart for the former scenario…the chart below is the triangle interpretation).