[B]• Euro Remains In Correction
• Japanese Yen at 20 day SMA
• British Pound Plummets
• Swiss Franc 1.1150 Pivot
• Canadian Dollar Tests 1.0200
• Australian Dollar Remains Choppy
• New Zealand Dollar May Break Higher[/B]
Commentary: We maintain that “wave 4 within the 5 wave bull cycle from 1.3261 is underway now. Wave 2 (of the same degree) took 4 weeks to play out and this week is week 3 for wave 4. Therefore, we expect a significant bottom to form next week.” It is possible that wave B of 4 is complete at 1.4770 and that wave C is underway towards 1.4500. The other possibility is that wave B will continue to play out and test 1.4800/35. Either way, a bearish bias is warranted against 1.4908.
Strategy: If already bearish, remain so against 1.4908. If not, get bearish near 1.4835
Commentary: The correction that we have expected could be complete at 109.66. A rally through 110.67 would instill confidence in this scenario. The other possibility is that the correction from 111.22 is not over yet and that a larger more complex correction is unfolding. Under this scenario, support should be stron at 109.00, which is where wave c (from 110.67) would equal wave a (111.22-109.56). Subjectively speaking, we favor the idea that the USDJPY correction is still underway and that a dip below 109.56 is needed to complete the correction.
Strategy: Get bullish near 109.00, against 107.20, target 1 at 113.50, target 2 much higher
Commentary: We wrote yesterday that “a well defined channel goes back to May 2006. Notice that the GBPUSD has broken below the midpoint of that channel. As such, a bearish bias is warranted until at least a test of channel support near 2.0100/2.0150.” The GBPUSD has plummeted and currently sits below 2.0400. Again, we continue to favor the downside for a test of channel support, which is at 2.0111 today and increases about 4 pips per day.
Strategy: Bearish, move risk to 2.0698 (from 2.0831), target 2.0200
Commentary: We wrote yesterday that “we were looking for an opportunity to get bullish for the next advance. Support should be strong near the confluence of the 50% of 1.0886-1.1327 / former 4th wave low at 1.1096/1.1106.” The USDCHF failed to reach the figure (1.1100) but bounced from the 38.2% of 1.0886 at 1.1158 instead. Similar to the EURUSD and USDJPY, a larger correction could unfold, but a short term bullish bias is warranted against 1.1153 since the decline from the top is in 3 waves. A larger correction could test the 61.8% of 1.0886-1.1327 at 1.1054.
Strategy: Get bullish near 1.1100, against 1.0886, target above 1.1327
Commentary: The USDCAD is putting the trendline / Fibonacci combination that we mentioned yesterday to test. Price is just above the 61.8% of 1.0866-.9055 at 1.0174. A daily close above the trendline gives scope to the next level of potential resistance at the 78.6% level (1.0479).
Strategy: Flat
Commentary: We are maintaining a bullish stance against .8653, although confidence in the pattern is low at this point. “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 TBD
Commentary: 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. Wave B may have ended at .7760 and wave C is underway now. Under this count, price is expected to come under .7435 and likely test the 50% of .6639-.7891 at .7265 before the next leg up begins. The NZDUSD count is more clear than the AUDUSD count. The bearish Kiwi count calls into question our short term bullish stance regarding the AUDUSD.
Strategy: Flat