• Euro Correction at Midpoint
• Japanese Yen Already in Wave C?
• British Pound To Test Channel Support Next Week
• Swiss Franc Wave 4 Might Be Over at 1.1353
• Canadian Dollar Towards at Least .9800
• Australian Dollar Challenges 20 day SMA
• New Zealand Dollar Alternate Count Immediately Bullish
Commentary: A cautious bearish bias is warranted against 1.4770 but a larger correction is likely playing out in the form of a flat or triangle. This suggests that a test of 1.4800 (61.8% of 1.4966-1.4526) is possible (if not probable) before bearish potential comes to the forefront. Elliott channeling suggests that the correction is not over since the decline in wave iv has yet to challenge the parallel line that defines the uptrend from 1.3261. We will have a special report on the EURUSD (Elliott and technically based) out later this afternoon.
Strategy: Exit bearish position
Commentary: The USDJPY has run into chart resistance from the former 4th wave extreme at 111.76. It is possible that wave C of the A-B-C is underway towards 113.50/114.00 but the character of the advance does not fit as a C wave. “The other scenario is that a larger correction is underway (expanded flat…arrows shown in red) and that the ‘real’ next leg up in the USDJPY will not occur until a test of 109.21 (50% of 107.20-111.22). That scenario is outlined here.
Strategy: Flat
Commentary: There is not change to the GBPUSD outlook. We wrote yesterday that “a small period of consolidaton is in order before we get a test of the mentioned channel support (probably next week) closer to 2.0100. A measured objective is at 2.0024 (100% extension of 2.1160-2.0353/2.0831).” That consolidation is unfolding now. We expect a test of the mentioned channel support early next week.
Strategy: Flat
Commentary: We have been looking to get bullish the USDCHF recently but the wave count on the daily chart argues for a drop to a new low (below 1.0886) before a larger recovery. With price stalling near the 4th wave (iv) of one less degree, probability is high that the USDCHF is beginning a wave v decline to complete larger wave 3 within the 5 wave bearish cycle from 1.2468.
Strategy: Bearish, against 1.1353, target 1.0886
Commentary: We have showed the daily chart with the resisting trendline and 61.8% Fibonacci level the last few days. That confluence turned us bearish near 1.0200 and there is much more bearish potential. In fact, the USDCAD will not even have retraced 38.2% of its rally from .9055 until .9772. Potential support prior to that level is a line at .9940. In sunmmary, remain bearish.
Strategy: Bearish move risk to 1.0149 (from 1.0216), target 1 at .9790
Commentary: We have stuck to our guns regarding the bullish count and patience might be paying off here. “The decline from .9399 could be just an a-b-c decline. This is suggestive of a resumption of the uptrend and eventual rally through .9399. The other count is bearish and suggests that an a-b-c flat correction is unfolding from .8753. In either case, price is expected to exceed .9068.”
Strategy: Bullish, against .8653, target .9140
Commentary: We would still like to see a larger corrective setback in the Kiwi before committing ot he bull side but we have presented an alternate (immediately bullish) count in red letters. The large 5 wave advance from .6639-.7891 indicates that the larger trend is up but a larger correction is expected before a resumption of the uptrend. The decline from .7891 has yet to even reach the 38.2% level of the previous rally. As such, the decline from .7891-.7435 is most likely just wave A in a larger A-B-C decline with the current advance as wave B. However, a rally through .7891 would force us to switch our count to the alternate (in red) bullish count.
Strategy: Flat