USDJPY Rally Accelerating; Prepare for Test of 118.00

  • Euro Registers High Above 1.4100
  • Japanese Yen Working Towards 118.00
  • British Pound In Wave 3 Higher?
  • Swiss Franc Reversal From Below 1.1700
  • Canadian Dollar Reverses From Below 1.0000
  • Australian Dollar Correction Underway?
  • New Zealand Dollar Hits Intial Bullish Objective


Commentary: We wrote yesterday that “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.” A top is in place at 1.4119 but the degree of that top is unclear. A decline to at least 1.4023 is expected but a deeper decline would likely test a former 4th wave at 1.3936. A rally in 3 waves presents an opportunity to get bearish against the top (1.4119)

Strategy: Flat

Commentary: There is no change in the call for a return to 118.00. We proposed an alternate count yesterday that has a triangle unfolding but our favored count calls for an advance in wave C of the A-B-C correction from 111.59 (wave C began at 112.59). The A-B-C is expected to complete larger wave 2 in a 5 wave bear cycle that began at 124.13. 118.12 is the 100% ext. of 111.59-117.12/112.59 (where C would equal A).

Strategy: Remain bullish, against 112.59, target 118.00

Commentary: We presented the bullish count yesterday and it is tracking well. “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, move risk to 1.9951 (from 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. It looks like one more low 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.” That drop may have ended at 1.1677. Similar to the EURUSD, an opportunity presents itself on a 3 wave setback.
Strategy: Flat

Commentary: The USDCAD dropped to .9936 to complete 5 waves down from 1.0173. We wrote yesterday to “look for consolilation 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 1.0173 (former resistance) before a drop to yet a new low. That would possibly complete the entire decline from 1.1825.” This scenario is playing out as the USDCAD has rallied over 100 pips from the low this morning. Look for at least a rally back to 1.0173. We willl be able to better assess the situation as the form of the advance unfolds.
Strategy: Bullish now, against .9936, target 1 is 1.0173, target 2 is TBD

Commentary: We wrote yesterday that “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.” That correction is either complete at .8605 as the decline from the top (.8702 is in 3 waves) or the decline from .8702 is just the first leg in a more complex correction. If that is the case (that the decline is just the first leg), then a deeper decline may very well test .8492 before an advance.
Strategy: Flat

Commentary: The Kiwi structure is unfolding as expected. Be careful here though because the first bullish objectives (the 100% ext. of .6639-.7272/.6824 at .7456) has already been hit. The next potential resistance levels are the 61.8% of .8108-.6639 at .7547 and .7589, which is the 161.8% ext. of .6824-.7185/.7005. .7325 is near term support. A deeper correction would potentially test .7227.

Strategy: Remain bullish, move risk to .7185 (from .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.