[B]• Euro Reverses Ahead of 1.4400
• Japanese Yen 5 Waves From 117.93?
• British Pound Tumbles From 2.0500
• Swiss Franc Completes Terminal Thrust From Triangle
• Canadian Dollar Reverses Ahead of .9600
• Australian Dollar Wave 3 or c Down Underway
• New Zealand Dollar Should Plummet Soon[/B]
Commentary: The EURUSD has made a significant reversal. The decline from 1.4394 appears to be in an extended 3rd wave. A 4th wave correction and drop to a new low in a 5th wave should lead to a larger upward correction. That is the opportunity that we will use to get bearish against 1.4349.
Strategy: Flat
Commentary: It is possible to count 5 waves down from 117.93 so a larger correction is due unless the decline is extending. Under the extension scenario, 114.59 is the 100% of 113.24-114.32/113.51 and a rally to there would potentially complete a correction. This level is also just above the gap open from this weekend. If a larger correction is playing out, then look for resistance at 115.02 (38.2% of 117.93-113.24).
Strategy: Flat
Commentary: The reversal in Cable looks exactly the same as in the EURUSD. The decline is currently in an extended 3rd wave lower and some consolidation in a small 4th wave should happen soon and give way to a 5th wave decline before a larger upward correction in wave 2. That correction will offer is the opportunity to get bearish against the high (2.0547).
Strategy: Flat
Commentary: We wrote Friday that “the USDCHF is headed below 1.1623 to complete the larger decline (which is a terminal thrust from a triangle). A drop below 1.1623 would possibly complete 5 waves down from 1.2468 and give way to a reversal and much larger rally.” After dropping to 1.1599, the USDCHF has skyrocketed nearly 200 pips higher. It is our contention that the pair is headed back to at least the 1.2200 level and possibly much higher.
Strategy: Bullish, against 1.1599, target TBD
Commentary: The USDCAD has finally turned higher. The short term pattern is the exact same as the EURUSD and GBPUSD (but the inverse of course). That is, a small 4th wave correction is unfolding now and once 5 waves up are completed, we expect a deeper correction (lower). This would allow bulls to get aggressive. Given the extreme sentiment extreme in place, this reversal may prove to be the most vicious of all.
Strategy: Flat
Commentary: We wrote last week that, “the AUDUSD is approaching a confluence of Fibonacci levels. The 61.8% of .9077-.8822 is at .8979 and the 100% extension of .8822-.8972/.8838 is at .8988. These are potential reversal levels. From a short EW perspective, the rally from .8822 is clearly corrective and a bearish stance is warranted against .9077.” Wave 3 (or c) is underway now and the pair is approaching the 100% ext of .9077-.8822/.8893, which is potential support. A short term bearish objective is at the 161.8% at .8580.
Strategy: Remain bearish, move risk to .8993 (from .9077), target .8580
Commentary: Kiwi is in the exact same position as the AUSUSD (although the pair has held up a bit better). We wrote Friday that “a wave 2 appears to be nearing completion as price has stalled at the 38.2% of the .7785-.7394 decline at .7543.” Wave 2 did end at .7555 and the break below .7394 confirms that wave 3 (or c) lower is underway. Weakness should continue until at least.7164 (100% of .7785-.7394/.7555), although we contend that a longer term bear market is underway. See our special report from Friday at NZDUSD Top.
Strategy: Get bearish now, against .7500, target 1 at .6930
