• Euro In Beginning of Blow off Top?
• Japanese Yen Attempting 107.20 Again
• British Pound Decline Looks Incomplete
• Swiss Franc A Mighty Force
• Canadian Dollar Still In Correction
• Australian Dollar Good Buy on Dips
• New Zealand Dollar May Plummet Soon
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Commentary: The EURUSD may have entered wave iii of 3 of larger 5. If this is the case, then the rally will accelerate in the next few days. Wave 3 higher is considered underway as long as price is above 1.4569. From a bigger picture perspective, the FX market is being driven right now by fear (fearing the US dollar). Fear is powerful and is the emotion that typically leads to parabolic moves.
Strategy: Bullish, against 1.4687, target 1.5300
Visit our recently updated Euro Currency Room for specific resources geared towards this currency.
Commentary: As long as price is above 107.20, we are sticking with the ‘larger correction scenario’. “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). The decline from 114.66, although sharp, is best counted as a triple zigzag (corrective). We expect wave Y to end above 114.66 (probably near the 78.6% of 117.93-107.20 at 115.63.)” Even if the decline from the 114.66 is an impulse, then a larger corrective advance is expected; which would offer the opportunity to get bearish.
Strategy: Exit bearish position
Visit our recently updated Yen Currency Room for specific resources geared towards this currency.
Commentary: We wrote yesterday that “additional losses seem likely near term as the form of the decline from 2.0101 looks far from complete. 1.9515 (161.8% of 2.1160-2.0353/2.0821) is potential support.” After slipping to 1.9672 this morning, Cable has enjoyed a strong bounce, but the decline from 2.0101 does not look complete. If the decline from 2.0101 is a 5th wave, then the fall should divide into 5 waves itself.
Strategy: Bearish, against 2.0101, target 1.9530
Visit our recently updated British Pound Currency Room for specific resources geared towards this currency.
Commentary: We wrote yesterday that “the 1.1594-1.1226 USDCHF decline completed wave 1 within a 5 wave bear cycle and the rally to 1.1371 most likely completed wave 2. Weakness since then is the beginning of wave 3 lower, which we expect to extend, possibly to the 161.8% extension of 1.1594-1.1226/1.1371 at 1.0779. The bearish bias is strong as long as price is below 1.1371.” There is no change to this outlook.
Strategy: Bearish, move risk to 1.1163 (from 1.1371), target TBD
Commentary: Near term, the USDCAD is completing wave B within the A-B-C correction from 1.0248 (or wave 2 within a 1-2-3-4-5 impulse). Potential resistance is at the 61.8% of 1.0248-.9755 at 1.0060. Look for a top and reversal in that area. The next bearish leg should challenge .9500.
Strategy: Get bearish bear 1.0060, target .9500
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency.
Commentary: There is no change to the AUDUSD call for a dip to at least .8709 before a big move higher. “The correction from .9400 is either complete at .8749 or close to complete. 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. Near term, the last part of wave i is ending as a diagonal which began at .8709. A decline to this level would complete wave ii.”
Strategy: Bullish against .8549, target above .9400
Commentary: The NZDUSD may be about to fall…and hard. The decline from .7937 to .7507 is a 5 wave decline and is either wave 1 down in a 5 wave bear cycle or wave A down in a 3 wave bear cycle (either way…a drop below .7507 is expected). The rally to .7791 is best counted as a 3 wave advance and the 61.8% retrace of .7937-.7507 has held twice.
Strategy: Bearish, move risk to .7791 (from .7937), target below .7435