[B]• Euro Breaks Through Resistance
• Japanese Yen Pivot is 113.77
• British Pound False Breakout
• Swiss Franc Testing Prior Extreme
• Canadian Dollar B Wave?
• Australian Dollar 5th Wave Could Extend Higher
• New Zealand Dollar Strong Support Near .7580[/B]
Commentary: The ending diagonal scenario that we proposed might be unfolding. The rally from 1.4125 is wave iii of the diagonal and is either close to topping or will continue to push higher. Downside potential at this point looks limited as wave iv of the diagonal will be the next downside action and that will be followed by wave iv higher to complete the advance. In summary, the short term trend remains up as long as price is above 1.4125 but the rally from here could be choppy.
Strategy: Remain bullish, against 1.4188, Target TBD.
Commentary: There is no change to the USDJPY as we believe that a larger correction is unfolding from 113.24. It is possible to count 5 waves down from 117.93 so a larger correction is due unless the decline is extending. Look for resistance at 115.56 (100% extension of 113.24-115.04/113.76…this is also close to the former 4th wave at 115.72) and the 61.8% of 117.93-113.24 at 116.14. Once we see evidence of a top, we will be getting aggressively bearish (and we’ll let you know here). Very short term traders might try and trade this small c wave higher with risk at 113.76.
Strategy: Flat
Commentary: In typical Cable fashion, the pair broke through the top of the recent range this morning (2.0550) and traded to 2.0573 before reversing lower. The entire rally from 2.0426 looks corrective, indicating that the rally could be a diagonal. In fact, the entire rally from 1.9651 looks corrective as the waves overlap. Again, this reinforces what we have held for weeks, which is that everything from 2.0654 is a big correction. The 3rd wave (wave c) of the correction is about to begin and should be an impulse (fast decline), soa bearish bias is warranted against 2.0654
Strategy: Bearish now, against 2.0654, target TBD (below 1.9651)
Commentary: We maintain that the drop below 1.1623 completed 5 waves down from 1.2468 and that a large rally is underway. Wave c within an a-b-c decline from 1.1785 may be complete (or close to it) as price is testing the 78.6% of 1.1599-1.1785 at 1.1639. A rally through 1.1703 instills confidence in the larger bullish outlook.
Strategy: Bullish, against 1.1599, target TBD
Commentary: We wrote yesterday to “look for support in the .9516/88 zone (weekly pivot zone).” The low today was at .9588 and price may be turning higher for a test of at least .9734. The structure of the decline from .9734 looks like a larger B wave. The individual legs of the decline are all in 3 waves and the decline itself is in 3 waves. If this is a B wave, then price is likely to exceed .9734 before bearish potential comes to the forefront. There is the possibility that this is a more significant low as well but there is no evidence of a turn yet.
Strategy: Bullish against .9589, target .9734
Commentary: We wrote yesterday that “the internal structure suggests that this break could extend for some time. If wave 5 from .8750 equals wave 1 (.7673-.8333), then price would extend to .9410. The rally made it to .9145 today. Since the pair is in a larger 5th wave, every tick higher increases the risk of a reversal. But, the rally appears to be in just the 3rd wave within the 5th so the AUDUSD should continue to extend higher. The structure is bullish as long as price is above .8935. Short term support (for those that wish to try and join in on the rally) is the …9041/82 zone.
Strategy: Flat
Commentary: We presented the bullish count yesterday, which suggested that “a rally is likely to accelerate in a small 3rd wave. Price above .7467 keeps the trend pointed higher. Coming under this level triggers the bearish count.” Kiwi’s rally has continued and should continue. Support should be strong near .7580.
Strategy: Get bullish near .7580, against .7467, for a rally through .7785
