- Euro Breaks 1.4000
- Japanese Yen Alternate Count is Triangle
- British Pound Bullish Bias Warranted Against 1.9879
- Swiss Franc Testing 1.1700
- Canadian Dollar Tests 1.0000
- Australian Dollar To Enter Correction
- New Zealand Dollar Remains Bullish
SEE A DECRIPTION AT THE BOTTOM OF THIS REPORT FOR JTRENDW AND JTRENDD
Commentary: We wrote yesterday that wave 5 is indeed underway from 1.3828 and is appears that one more high (above 1.3988) is required before a more significant top is in place. This 15 minute chart shows the structure of wave 5 from 1.3828 and suggests that it is close to complete. A rally above 1.3988 satisfies minimum expectations for the end of wave 5. The EURUSD has advanced as suggested and a rally above 1.4065 would possibly complete wave 5 that began at 1.3828. The risk of a reversal increases with every tick higher but, as always, we will wait for a 5 wave decline and 3 wave setback before turning bearish.
Strategy: Flat (exited longs at 1.3988)
Commentary: There is no change in the call for a return to 118.00 but we are proposing an alternate count today (because it is always a good idea to do so). The count that we have favored for weeks treats the advance from 111.59 as wave a within the a-b-c correction that is larger wave 2. Wave b of that correction ended at 112.59 and we have favored the idea that wave c is underway now towards 118.00. This count remains favored at the current juncture but the alternate that we propose today is that a triangle is unfolding from 111.59 as large wave B within an A-B-C decline from 124.13. In this triangle alternate, expect weakness towards 113.50/114.30 in wave d of the triangle before a small bounce in wave e, which will be followed by a terminal thrust that ends well below 111.59. Again, the count that calls for a return to 118.00 is favored.
Strategy: Remain bullish, against 112.59, target 118.00
Commentary: The inability of Cable to drop below 1.9879 in a 5th wave forces us to favor the bullish count, which is fairly bullish. The decline from 2.0366 is a 3 wave decline and the rally from 1.9879 can be labeled an impulse so that places Cable in a 3rd wave rally now. A push through 2.0172 strengthens the bullish bias and would likely lead to a push through 2.0366. 1.9879 is critical to the bullish case.
Strategy: Bullish now, against 1.9879, target above 2.0366 (add to position on a rally through 2.0172)
Commentary: We wrote yesterday that a drop below 1.1793 would potentially complete 5 waves from 1.1922 and give way to either a corrective rally or an outright reversal. Remember that the larger pattern has the USDCHF thrusting lower from a triangle and thrusts from triangles are terminal. Similar to the EURUSD, it looks like one more low (high in the case of the EURUSD) is needed before potential for a bigger bounce comes to the forefront. That is, a drop below 1.1711 would make the decline from 1.1878 5 waves and gives scope to at least a corrective rally.
Strategy: Flat
Commentary: PARITY. The USDCAD dropped to 1.0004 this morning and lower prices lie ahead. The vertical drop from 1.0132 is undoubtedly a 3rd wave in a 5 wave decline from 1.0173. As such, look for consolidation in a 4th wave correction before a drop to a new low (below 1.0004). A drop below 1.0004 to complete 5 waves down from 1.0173 would potentially lead to a larger corrective rally back to 1.0175 (former resistance) before a drop to yet a new low. That would possibly complete the entire decline from 1.1825. We are showing the 25 min chart this morning.
Strategy: Flat
Commentary: The rally from .8274 is likely nearing an end. The rally is in its 5th wave, so the trend is towards higher prices but not before a substantial correction. Within the 5 wave rally from .8274, the 5th wave from .8486 is likely to trace out a wave 4 correction that ends near .8605 before a new high in wave 5 of 5. The path is shown on the chart above.
Strategy: Flat
Commentary: The Kiwi structure is unfolding as expected. We wrote yesterday that a correction is likely complete at .7005 and we expect the rally to accelerate in the next few hours in a 3rd wave. The rally accelerated and the pair has exceeded the wave a high of .7272. Bullish objectives are the 100% ext. of .6639-.7272/.6824 at .7456 and the 61.8% of .8108-.6639 at .7547. We would like to update the bullish objectives to .7547/89. .7589 is the 161.8% ext. of .6824-.7185/.7005. Near term support is at .7323 and .7227.
Strategy: Remain bullish, keep risk at .7005, target .7547/89
JTRENDW uses 13 week RSI in order to gauge strength of trend. The trend is considered Bullish if the indicator registers a reading above 60. The trend is considered Bearish if the indicator registers a reading below 40. If the reading is between 40 and 60, then the reading is Flat. The JTRENDD uses 13 days of data. An example of JTRENDW is below for the EURUSD.
