[B]• Euro 1.4800 Formidable So Far
• Japanese Yen Remains in Correction
• British Pound 5 Waves Up
• Swiss Franc Trend Intact
• Canadian Dollar 5 Wave Advance (USDCAD drop)
• Australian Dollar Completes 5 Wave Advance
• New Zealand Dollar Same as Aussie[/B]
[B]SEE A DESCRIPTION AT THE BOTTOM OF THIS REPORT FOR THE INDICATORS IN THE TABLE
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Commentary[/B]: The triangle is playing out as expected. The rally from 1.4365 is viewed as wave d within the a-b-c-d-e triangle. It appears that this leg of the triangle could extend. Potential resistance is at 1.4820 and 1.4900 (triangle resistance), although it is possible that wave d of the triangle is complete now. The next leg of the triangle will be lower in wave e in order to complete larger wave 4 before the thrust higher in wave 5 through 1.50. Look to get bullish near 1.4500, against 1.4310, for a run at the mid 1.50’s.
[B]Strategy[/B]: Flat
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[B]Commentary[/B]: We still maintain that the strong rally from 104.97 is probably a c wave that will complete a larger second wave as an expanded flat. If this count is correct, then price is expected to exceed 107.92 and resistance should be strong in the 108.33 area. We will look to return to a bearish bias following a rally through 107.92 (against 110.11) for a drop to our objectives that are below 100 (near 97). Another possible count is that a triangle is unfolding from 104.97 – this count is gaining traction as the advance from 104.97 is in 3 waves (legs of triangles unfold in 3 waves).
[B]Strategy[/B]: Flat
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[B]Commentary[/B]: Please see yesterday’s commentary for a more in depth explanation on the count from 2.1160. We view the entire decline from 2.1160 as wave 1 or A in a 5 or 3 wave bear cycle. Therefore the rally from 1.9337 is viewed as wave A of the 3 wave countertrend rally. Look for price to come into the 1.9563/1.9702 zone before another rally completes the correction sequence from 1.9337.
[B]Strategy[/B]: Exit bullish position
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[B]Commentary[/B]: The bias is bearish as long as price is below 1.1122. The pair rolled over from just below 1.1000, but 1.1122 remains the critical bearish ‘line in the sand’. The decline from 1.1122 is probably a 5th wave (of larger 3) and an objective is where wave 5 equals 61.8% of waves 1 through 3 – at 1.0553.
[B]Strategy[/B]: Bearish, against 1.1122, target 1.0560
[B]Commentary[/B]: The scenario that we have described recently is playing out. We wrote yesterday that “If the rally from 1.0012 fails and gives way to a drop below 1.0012, then there would be 5 waves down from 1.0378. Expectations then would be for a corrective rally that we would look to sell into.” The drop below 1.0012 does complete 5 waves down from 1.0378 and the mentioned corrective advance is expected to begin soon and bring price back to at least 1.0117 but probably higher. We will look to sell into this rally.
[B]Strategy[/B]: Flat
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[B]Commentary[/B]: We wrote yesterday that “If price exceeds .8853, then the pattern would be cleared up and we would be confident adopting a bullish bias AFTER a corrective decline that brings price back to .8700/65.” The AUDUSD did exceed .8853 and 5 waves up from .8512 are complete (or very close to complete). Expectations are for a decline to reach at least the .8750 level over the course of the next week. This will present a buying opportunity.
[B]Strategy[/B]: Flat
[B]Commentary[/B]: The NZDUSD rally from .7383 is quite ugly but can be counted as a 5 wave advance. Given that the GBPUSD, USDCAD, and AUDUSD all show clear 5 wave moves towards dollar weakness – and that a countertrend 3 wave dollar rally is expected across the board, it is reasonable to expect a NZDUSD drop to at least .7639 (38.2% of .7383-.7796) before the next advance.
[B]Strategy[/B]: Bearish now, against .7933, EXIT near .7700
MONTHLY, WEEKLY and DAILY TRENDS are determined by rolling pivots (4 month, 4 week, and 5 day). When price is above the rolling pivot, the trend is considered bullish. When price is below the rolling pivot, the trend is considered bearish.
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