Euro Breakout on the Horizon
Japanese Yen Finds Buyers
British Pound at 78.6% Fibo
Swiss Franc 1.2375 Key
Canadian Dollar Probes 1.1700
Australian Dollar .7698 Bearish Pivot
New Zealand Dollar Holds Support
EURUSD There is little changed regarding the EURUSD as the range contracts. A contracting range indicates increased potential for a breakout. We are still looking for a low to be made below 1.2865, which would be followed by a rally that will retrace a portion of the decline from 1.3367. 1.3066 has held as resistance so the bearish structure remains intact. Measured objectives are centered near 1.2750. The 61.8% extension of 1.3367-1.2865 / 1.3066 is at 1.2756 and the level where wave 5 would equal wave 1 is at 1.2747. Remember that a decline below 1.2865 satisfies minimum expectations for a 5th wave down. Only a rally above 1.3066 (Fridays) high suggests greater bullish potential.
USDJPY We have recently focused on the 5 waves up from 119.96 and mentioned that a corrective decline is probable. In the event of a decline, look for initial support at the 38.2% of 119.96-121.66 at 121.01. This is also the 4th wave of one lesser degree (2/8 low). Price has declined to the 38.2% of 119.97-121.66 in what is so far a 3 wave structure so be wary of a resumption of strength prior to 121.01. A push through 121.56 favors bulls.
GBPUSD An a-b-c correction from 1.9915 may be nearing an end as there are 5 waves down in the C position (from 1.9750). The 78.6% of 1.9260-1.9915 defends the area where A (1.9915-1.9549) would equal C (from 1.9750) at 1.9380. A decline much below 1.9380 suggests that a larger downtrend is underway.
USDCHF The USDCHF is in the exact same position as the euro but as the inverse. The pair has held the 1.2375 level after testing it 3 times since 1/23. The shelf of support has led to a rally in what may be the final 5th wave to complete a 5 wave sequence from 1.1878. The next bullish target is the 1.618 extension of 1.2271 1.1878 / 1.2110 at 1.2746. 1.2427 is initial support and price above there warrants an aggressive bullish stance. Only a decline below 1.2375 negates the bullish wave implications.
USDCAD Fridays turn lower likely marks the resumption of the long term downtrend. Long term focus is to below 1.0927. 5 small waves down from 1.1879 to 1.1707gave way to a corrective bounce that fell shy just short of the 38.2% at 1.1772. A break below 1.1707 strongly indicates that another impulsive move down is underway. A rally above 1.1770 suggests that a correction is still unfolding. Resistance in this case would be at the 61.8% at 1.1813.
AUDUSD The AUDUSD bounced just prior to support at .7698, but wave structure continues to favor the downside. A break of .7698 would suggest the pair was in a 3rd wave down that could challenge the 161.8% extension of .7982-.7760 / .7941 at .7578. .7801 needs to hold if the bearish structure is to remain intact. Keep in mind that the longer term triangle (2 years long) also favors the downside. For more on the AUDUSD, see http://www.dailyfx.com/story/charting_center/weekly_chart_analysis/Descending_from_the_Top_of_1171043401869.html
NZDUSD We have concentrated recently on the fact that Kiwi bounced from where the .7038 decline equals the .7099-.6841 decline. As such, we are left with just a 3 wave correction of equal legs from .7099. This structure is suggestive of a bottoming in NZDUSD (as long as .6769 holds). A bullish outcome remains possible as long as .6769 holds. A rally through .6896 would warrant a bullish bias in Kiwi.