[B]• Euro Wave 4 Correction
• Japanese Yen Also in Wave 4
• British Pound Soaring Towards 2.1200
• Swiss Franc Same as Euro
• Canadian Dollar Large Correction Back to .9750
• Australian Dollar Expanded Flat?
• New Zealand Dollar Unclear[/B]
Commentary: We wrote yesterday to “expect a small 4th wave correction that could reach 1.4434 before a new high in wave 5.” That small correction may be underway now as the pair has traded down from 1.4731. A slight new high (above 1.4731) can not be ruled out before the larger correction takes place. Still, the next good opportunity comes on buying the expected wave 4 dip near 1.4500, for a run to 1.5000.
Strategy: Flat
Commentary: “The 161.8% extension of 117.92-113.24/115.89 is at 108.30, which is an initial bearish objective. Coming under 111.59 reinforces the bearish bias.” Near term, a small 4th wave (of larger 3) may be unfolding. The corrective rally should be near its terminus as the rally has reached the 38.2% retrace of wave iii and a former congestion area at 113.39.
Strategy: Remain bearish, move risk to 114.78 ( from 115.41), target 1 at 108.30
Commentary: A resistance line from the longer term bull channel is just above 2.1100. If the bullish count that treats the entire rally from 2.0245 as wave iii of 3 is correct, then price could test the 161.8% extension of 1.9879-2.0494/2.0245 at 2.1240 fairly soon. Similar to the EURUSD in form, we would then expect a correction in wave 4, followed by a new high in wave 5 (2.1500??).
Strategy: Flat
Commentary: The USDCHF is in the same exact position as the EURUSD (but inverse). A third wave is either over at 1.1257 or close to over and a 4th wave correction is unfolding now towards Fibo resistance at 1.1458 (38.2% of 1.1785-1.1257). A new low in wave 5 is expected to complete the larger decline following this corrective advance.
Strategy: Flat (bearish objective hit at 1.1350)
Commentary: We wrote yesterday that “a bearish objective for the end of wave 3 in the 5 wave bearish cycle from 1.1875 is at .8986. With the low today at .9055, the potential for a corrective rally to begin rather soon is high.” The rally has started and we expect the advance to continue until the confluence of the 38.2% of 1.0866-.9055 / former congestion near .9750 before the USDCAD reverses and drops below .9000.
Strategy: Flat (EURCAD looks like a good play….long)
Commentary: With the rally from .9106-.9400 in just 3 waves and with the decline from .9400 appearing impulsive, evidence favors labeling the down, up, down sequence from .9342-.9106-.9400 as an expanded flat, with wave C of that flat currently in progress. As such, it is our contention that price will drop below .9106 before the Aussie finds good demand.
Strategy: Bearish now, against .9400, target TBD (below .9106)
Commentary: We wrote yesterday that “Kiwi’s break above .7738 opens up the possibility that the NZDUSD is in a 3rd wave to much higher levels. This seems odd given that the other dollar pairs suggest at least a small correction prior to the continuation of the weak dollar trend but it is the strucutre that we see as a possible outcome. If this is the pattern unfolding, then the rally is likely to continue while price remains above .7568.” This was one of the pair we were correct about as the NZDUSD has rallied through .7800. An objective is at the 161.8% extension of .7365-.7738/.7568 at .8172. This outlook is complicated by the bearish pattern in the Aussie. Still, maintain a bullish stance against .7568.
Strategy: Flat
