• Euro Expanded Flat?
• Japanese Yen Turning Before 107.20
• British Pound Sinking Fast
• Swiss Franc Bull Trend Intact Below 1.1371
• Canadian Dollar Wave B Correction
• Australian Dollar Choppy Rally Beginning of Much Larger Rally
• New Zealand Dollar Gets a Bid
Commentary: The larger trend remains bullish but we would still like to see a larger setback in wave 2. An expanded flat might be unfolding from 1.4747. If this is the case, then the EURUSD will dip below 1.4569 before the next leg higher begins; which we expect to challenge 1.5200/1.5300.
Strategy: Flat
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Commentary: We Monday that “one possibility is that a larger more complex correction is unfolding and that this decline is just wave X. Potential support is at 111.31 and 110.09 (100% and 161.8% extensions of 114.65-112.67/113.29).” The USDJPY dipped to 108.23 this morning in what is probably the end of wave X. The decline from 114.66, although sharp, is best counted as a triple zigzag (corrective). We expect wave Y to end above 114.66 (probably near the 78.6% of 117.93-107.20 at 115.63.)
Strategy: Exit bearish position
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Commentary: We wrote on Monday to “expect a top and reversal in the 2.0069-2.0166 area. This area is the 38.2%-50% level of 2.0576-1.9755. The rally from 1.9755 should complete wave iv of C within the A-B-C correction from 2.1160. We will be looking for a significant bottom to form in the 1.9500 area.” After reversing at 2.0101 on Monday, the GBPUSD has come under the 12/24 low of 1.9755. Additional losses seem likely near term as the form of the decline from 2.0101 looks far from complete. 1.9515 (161.8% of 2.1160-2.0353/2.0821) is potential support.
Strategy: Bearish, move risk to 2.0101 (from 2.0195), target 1.9530
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Commentary: The 1.1594-1.1226 USDCHF decline completed wave 1 within a 5 wave bear cycle and the rally to 1.1371 most likely completed wave 2. Weakness since then is the beginning of wave 3 lower, which we expect to extend, possibly to the 161.8% extension of 1.1594-1.1226/1.1371 at 1.0779. The bearish bias is strong as long as price is below 1.1371.
Strategy: Get bearish near 1.1233-1.1287, against 1.1371, target TBD
Commentary: Near term, the USDCAD is completing wave B within the A-B-C correction from 1.0248 (or wave 2 within a 1-2-3-4-5 impulse). Potential resistance is at the 61.8% of 1.0248-.9755 at 1.0060. Look for a top and reversal in that area. The next bearish leg should challenge .9500.
Strategy: Flat
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Commentary: The correction from .9400 is either complete at .8749 or close to complete. We expect the next advance to exceed .9400 and possibly test 1.0000 in order to compete a large A-B-C advance of Cycle degree that began in 2001. Near term, the last part of wave i is ending as a diagonal which began at .8709. A decline to this level would complete wave ii.
Strategy: Bullish against .8549, target above .9400
Commentary: We wrote last week that “wave i of C looks complete.7507. As such, a corrective setback to the .7671/.7773 zone (38.2% -61.8% of .7937-.7507) would offer a high probability short opportunity. “ As long as the pair is below .7794, a bearish bias is warranted.
Strategy: Bearish, against .7937, target below .7435