[B]• Euro May See Small Setback Before a New High
• Japanese Yen Nearing Reversal Point
• British Pound New 2007 High
• Swiss Franc Clear Opportunity
• Canadian Dollar Needs Another High (USDCAD Low) Before a Turn
• Australian Dollar Bigger Picture Due for a Turn
• New Zealand Dollar Should Rally Through .7785
[/B]
Commentary: If indeed an ending diagonal is unfolding from 1.4015, then wave iv of the diagonal should be underway now. A potential end for wave iv is at the 50%/61.8% retrace levels of 1.4125-1.4439 at 1.4282 and 1.4245. A new high in wave v of the diagonal is expected to then complete the diagonal. If a more bullish structure is unfolding, then price will exceed 1.4439 before coming under 1.4279. That would make the rally from 1.4125 an impulse but a correction lower would be expected to unfold. (Diagonal scenario shown on chart)
Strategy: Remain bullish, move risk to 1.4279 (from 1.4188), Target TBD.
Commentary: The USDJPY is playing out as expected. It is possible to count 5 waves down from 117.93 so a larger correction is unfolding. “Look for resistance at 115.56 (100% extension of 113.24-115.04/113.76…this is also close to the former 4th wave at 115.72) and the 61.8% of 117.93-113.24 at 116.14. Once we see evidence of a top, we will be getting aggressively bearish (and we’ll let you know here).”
Strategy: Flat
Commentary: The short term structure in the GBPUSD has been unclear for some time. Given that the EURUSD remains bullish and that the GBPUSD remains within its weekly bullish channel, a bullish bias is warranted for a potential test of the resistance trendline near 2.1000/2.1100. However, the alternate count treats the entire rally from 1.9651 as a large B wave, so be careful if attempting to play a breakout as the pair is testing the July high (2.0654) this morning.
Strategy: Flat
Commentary: We maintain that the drop below 1.1623 completed 5 waves down from 1.2468 and that a large rally is underway. Wave c within an a-b-c decline from 1.1785 may be complete at 1.1606 since it appears that a small 5 wave rally has unfolded from 1.1606 (this 5 up is considered wave i of 3). A rally through 1.1671 instills confidence in the larger bullish outlook. 1.1606 is critical to the bullish bias.
Strategy: Bullish, against 1.1606, target TBD
Commentary: The sentiment indicators that we follow (COT in particular) argue for a bottom to form now (but this has been the case for a while). When a market is extending for some time, we use a trick to try to attempt to identify when a market is likely to turn. Extended impulses will end after either 9 waves, 13 waves, 17 waves, etc (these are all derivations of 5 waves……5 + 4, 5 + 4 + 4, 5 + 4 + 4 + 4). The current decline is likely wave 13, which should end with one more low (below .9511). Once a low is registered, a small 5 wave rally will serve as our alert to get bullish.
Strategy: Flat
Commentary: Bigger picture, the rally from .7673 is in its 5th wave, indicating that an important top is about to form and that price should come back to at least .8750 (but the potential for a much more significant top is high). Within the 5th of the 5th (from .8750), it appears that one more high is required (above .9271) before a reversal will occur.
Strategy: Flat
Commentary: A rally is likely exceed .7738 soon and probably .7785 before a deeper correction unfolds. This would make 5 waves up from .6639…which completes large wave 1 in a new 5 wave bull cycle. A deep setback would then be expected to at least .7365 (likely lower) before wave 3 higher unfolds.
Strategy: Flat
