The EURUSD and GBPUSD are breaking higher from their respective bases that had formed over the past few days. Both pairs are in the early stages of larger bull moves. The USDJPY downtrend has resumed and are preferred count has the pair coming under 95.72 with 1.0586 remaining intact. The only currency that is expected to weaken against the US dollar in the coming days/weeks is the CAD.
The EURUSD bull scenario is unfolding as expected to this point. “The decline from 1.5664 is nearly equal to the 1.5817-1.5608 decline. Corrections (a-b-c) often sport 2 identical legs. This combined with the possibility that the advance from 1.5283 is a 5 wave rally supports the bullish case.” Even if a larger more complex correction is unfolding from 1.6018 (such as a flat or a triangle), price is still expected to exceed 1.5817. Risk can be moved to 1.5486 although price ideally remains above 1.5519.
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STRATEGY: Bullish, against 1.5486, target above 1.6018
The spike through 105.70 satisfies minimum expectations for wave Z. We wrote yesterday that “once we feel that we can confirm a top at 105.86, we will look for a short entry.” The short term USDJPY pattern strongly indicates that a top is in place (at least temporarily), so a bearish bias is warranted against 105.86.
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STRATEGY: Bearish, against 105.86, target TBD
We wrote yesterday “there is no confidence lost in the larger count. Today’s low is at what should be strong support from the confluence of the 50% of 1.9364-1.9850 / 5/21 low at 1.9612. Think about positioning long in the 1.9550/1.9600 area, against 1.9364.” The GBPUSD rally from 1.9609 is probably a 3rd wave. Minimum expectations are for a push through 1.9850. A bullish bias is warranted against 1.9609.
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STRATEGY: Bullish, against 1.9609, target above 1.9850
We have altered the count somewhat for the USDCHF. There is little doubt that the advance from .9647 is corrective because a triangle separates the two legs. The only question is whether or not the rally from .9647 is a complete 3 wave rally or just the first wave of a larger more complex correction. Regardless, a bearish bias is warranted against 1.0527. Near term resistance is at 1.0385.
STRATEGY: Bearish, against 1.0527, target TBD
The USDCAD is working higher from the 78.6% of .9710-1.0324 at .9841. The push through .9997 is evidence that a low is in place. Risk can now be moved to .9823. Remember, the minimum objective is above 1.0324
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STRATEGY: Bullish, against .9823, target above 1.0324
The advance from .8952 is likely the final leg of a diagonal that will lead to the major top mentioned in the longer term chart. “The rally from .8952 is wave C of a large 5th wave diagonal that could extend to a measured objective just below 1.00 in coming weeks (.9936).” Support has held at the trendline near .9500. A bullish bias is warranted against .9290 although price ideally remains above .9500.
STRATEGY: Bullish, against .9290, target .9936
From a price structure point of view, the decline since the March top at .8215 has been choppy and corrective. The drop counts well as a double flat (this is a complex correction). Moreover, the legs of the decline are roughly equal (a common characteristic among corrections). The leg up from .7536 is the closest thing to an impulse that the NZDUSD has shown since the March top. As such, a bullish bias is warranted against .7536 (ideally price remains above .7767) and the target is above .8215.
STRATEGY: Bullish, against .7536, target above .8215
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[1] STRATEGY is a summary of our best technical ideas. The ideas are subjective and are subject to change everyday although trades are typically held for at least a few days and sometimes a few weeks or more. Ideas are also included for crosses throughout the week; these are published at separate articles at DailyFX.