• Euro Presses Against High
• Japanese Yen Correcting Towards 115.50
• British Pound Range Continues
• Swiss Franc Bearish (USDCHF Bullish) Against 1.1599
• Canadian Dollar Trend Intact
• Australian Dollar Clears Prior High
• New Zealand Dollar Two Wave Counts
Commentary: We wrote yesterday that “the decline from 1.4279 has unfolded as a correction (zigzag). With the larger trend remaining up (as it has for some time), be sure to keep risk tight if dedicated to the bear side. On the other hand, a cautious bullish bias is warranted against 1.4188 for a break of 1.4349. A large ending diagonal might be unfolding in the 5th wave position within the 5 wave bull cycle from 1.3360.” At this point the diagonal may be unfolding or the EURUSD may be about to turn lower from a double top. So, if long, keep risk to 1.4188. Coming under there would make us bearish (showing a possibly bearish count here).
Strategy: Remain bullish, against 1.4188, Target TBD.
Commentary: We wrote yesterday that “the decline from 1.4279 has unfolded as a correction (zigzag). With the larger trend remaining up (as it has for some time), be sure to keep risk tight if dedicated to the bear side. On the other hand, a cautious bullish bias is warranted against 1.4188 for a break of 1.4349. A large ending diagonal might be unfolding in the 5th wave position within the 5 wave bull cycle from 1.3360.” At this point the diagonal may be unfolding or the EURUSD may be about to turn lower from a double top. So, if long, keep risk to 1.4188. Coming under there would make us bearish (showing a possibly bearish count here).
Strategy: Remain bullish, against 1.4188, Target TBD.
Commentary: Cable has been treacherous lately. The pattern from an EW perspective is not clear in our mind, but the series of lower highs from 1.9651 indicates that the trend remains up. Still, the overlapping nature of the rally from that point (unless these rallies are a series of 1st and 2nd waves) does not inspire confidence in the bull trend. Be careful is short against the range high (2.0547) since consolidation can give way to a brutal move.
Strategy: Flat
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 bounced from the 78.6% of 1.1599-1.1785 at 1.1639. A rally through 1.1785 instills confidence in the larger bullish outlook.
Strategy: Bullish, against 1.1599, target TBD
Commentary: We wrote yesterday that “the rally from .9623 is a textbook correction (in 3 waves), and suggests that the USDCAD will continue to drop…” Wave 5 (v) within a 5 wave decline from 1.0095 (which is wave 5 within a 5 wave cycle from 1.0866) is underway and is likely to probe a bit lower. Look for resistance in the .9616/88 zone (weekly pivot zone).
Strategy: Flat
Commentary: We wrote yesterday that “it looks rather clear that the AUDUSD requires one more high (above .9077) before ‘topping’ potential’ comes to the forefront.” The pair registered that high today and 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.
Strategy: Flat
Commentary: We are tracking two counts now in the Kiwi. Once treats the decline from .7785-.7394 as wave 1 within a larger bearish cycle. The other count treats the decline from .7785-.7365 as an a-b-c decline. Under the first count, price is likely to top soon (maybe near the 61.8% of .7785-.7394 at .7635). Under the latter count, a rally is likely to accelerate in small 3rd wave. Price above .7467 keeps the trend pointed higher. Coming under this level triggers the bearish count.
Strategy: Exit bearish position (at a loss)