[B]• Euro Drop Is Corrective
• Japanese Yen Nearing Objective
• British Pound Decline Also Corrective
• Swiss Franc Trades Sideways
• Canadian Dollar To .9750
• Australian Dollar Needs One More Low
• New Zealand Dollar at Crossroads[/B]
Commentary: We wrote last week to expect “a larger correction that could reach 1.4434 before a new high in wave 5.” The next good opportunity comes on buying the expected wave 4 dip near 1.4500, for a run to 1.5000.” The drop to 1.4520 yesterday likely completed wave 4 and price should exceed 1.4751 and test 1.5000 before a larger reversal.
Strategy: Bullish against 1.4520, target TBD
Commentary: We have focused on “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.” The drop from 115.91 reached 109.12 (roughly to the 161.8% extension), maiking it likely that the drop was wave 3 within the 5 wave cycle from 117.93. Expect this bounce (wave 4) to end near 110.72-111.71 (23.6%-38.2% of 115.91-109.12) before a new low in wave 5.
Strategy:Flat
Commentary: We wrote last week that “this could be just a large wave 4 correction, but we still expect a decline to the confluence of the 38.2% / former congestion area near 2.0800 (2.0817 to be exact). Wave 5 potential would then come to the forefront, and lead to a test of the Fibo target at 2.1240 (and maybe higher).” Well, the decline was much deeper than expected but the form of the decline was still corrective (3 waves…A-B-C). As such, expect a new high above 2.1160 in coming weeks. Preferably, price remains above 2.0646.
Strategy: Bullish, against 2.0522, target above 2.1160
Commentary: We wrote last week to expect “a 4th wave correction towards Fibo resistance at 1.1328/1.1415 (23.6-38.2% of 1.1785-1.1257). A new low in wave 5 is expected to complete the larger decline following this corrective advance.” The USDCHF reached 1.1299 but the correction seems shallow. Subjectively speaking, we favor a larger advance towards 1.1328 (former congestion as well) before a drop below 1.1188.
Strategy: Flat
Commentary: Last week, we wrote that “a large correction is unfolding in the 4th wave position towards the confluence of the 38.2% of 1.0866-.9055 / former congestion near .9750 before the USDCAD reverses and drops below .9000.” The rally hit .9724 yesterday and the USDCAD has come off nearly 200 pips since. However, the rally does not look complete. A 5th wave within the 5 wave advance from .9236 is required before we can think about getting bearish.
Strategy: Remain Bullish, move risk to .9404 (from .9236), target .9750
Commentary: We wrote last week that “is our contention that price will drop below .9106 before the Aussie finds good demand. The pattern is unfolding as expected so favor the downside until at least a break below .9106.” After plummeting below .8800, the AUDUSD found solid support at the former 4th wave. Still, it appears that one more low (below .8753) is required before we’ll see a larger rally.
Strategy: Flat
Commentary: Kiwi fell to the 161.8% extension of .7891-.7663-.7821. The pair is at a crossroads right now though. A drop below .7435 would make 5 waves from .7891 and give way to a larger upward correction. A rally through .7663 indicates that the entire decline was just a correction and that a new high will be registered soon.
Strategy: Flat
