New Zealand Dollar Triangle Breakout Opportunity

  • Euro Bullish Above 1.3727
  • Japanese Yen Correcting Back Towards 119.50
  • British Pound Breaks Down
  • Swiss Franc Former Resistance Now Support
  • Canadian Dollar Reverses From Near 1.0500
  • Australian Dollar Range Persists
  • New Zealand Dollar Triangle Breakout Opportunity

[B]Commentary[/B]: The structure is bullish above 1.3727 as a wave 4 correction is most likely unfolding from 1.3834. A dip below 1.3780 would complete the correction and lead to a rally to a new high (above 1.3838). A drop under 1.3727 (red) would strongly indicate that a larger correction was unfolding and that price is headed below 1.3608.

[B]Strategy[/B]: Flat

[B]Commentary[/B]: We wrote yesterday that “the drop under 117.59 satisfies minimum expectations for a 5th wave in a 5 wave decline that began at 124.13. This intial 5 wave decline makes up larger wave 1 or A in the new bearish cycle. Larger wave 2 or B is expected to unfold from little if any below 117.18 and makes its way to the Fibo reversal zone of 119.83-121.47.” There is no change to the outlook. The USDJPY should continue higher until 119.83-121.47 before a top and reversal.

[B]Strategy[/B]: Flat

[B]Commentary[/B]: We continue to look for “a drop to at least 1.9989 (100% extension of 2.0654-2.0181/2.0462). Potential support near this level is reinforced by the 61.8% of 1.9621-2.0654 at 2.0016.” The break below 2.0279 instills confidence in the bearish outlook.
[B]Strategy[/B]: Remain bearish, against 2.0462, target 2.0020

[B]Commentary[/B]: We maintain that the decline below 1.1877 “is the beginning of a thrust from a triangle. A measured objective for the end of the terminal thrust is 1.1364 (the 161.8% extension of 1.2468-1.1960/1.2165). The structure is bearish as long as price is below 1.2165.” Former support at 1.1979 may be resistance.
[B]Strategy[/B]: Remain Bearish against 1.2165, target 1.1400

[B]Commentary[/B]: After briefly dipping below 1.0500 last night, the USDCAD has rallied to 1.0560. This may be the beginning of the rally that takes out 1.0699 and leads to much higher prices. The bottom of the reversal zone that we have focused on is the 61.8% of 1.0340-1.0699 at 1.0477. With the pair reversing very close to this level, there is no reason to alter the bullish outlook. A more complex correction could unfold but that would still most likely include a rally towards 1.0620 near term.
[B]Strategy[/B]: Bullish now, against 1.0340, target TBD

[B]Commentary[/B]: The decline from .8870 is the beginning of larger wave 4 within the 5 wave rally from .7268. Over the next several weeks, the AUDUSD could decline to the former 4th wave at .8162. Wave A of the decline ended at .8458 and wave B is underway now. Wave B is unfolding as a flat or triangle. If a flat, then price may top close to .8664 (50% of .8870-.8458). If a triangle is unfolding, then a range will persist between .8614 and .8444 for the next day or so. The flat scenario is shown on the chart.
[B]Strategy[/B]: Flat

[B]Commentary[/B]: Kiwi is in a similar position as the AUDUSD. “A larger B wave or (2nd wave) is unfolding from .7553, which we expect to exceed .7731 before wave C (or 3rd wave) brings price much lower. The 38.2% of .8108-.7553 at .7765 is an objective for the end of the rally from .7531.” A triangle may be complete. If so, then the pair is likely to break down (below .7531) and test the 6/13 low at .7452 in coming days. A rally above .7731 indicates that the B wave is unfolding as a flat and that price will test the mentioned resistance.

[B]Strategy[/B]: Bearish now, against .7662, target .7460
*JTREND is a proprietary calculation that uses recent highs, lows and closes to determine the trend. JTRENDLT is the longer term trend and uses the last 4 weeks of price data. JTRENDST is the shorter term trend and uses the last 5 days of price data. An example is below. Blue bars denote bullish trend and red bars denote bearish trend. The chart below is the EURUSD weekly chart.