Yen Ready to Turn Again as Dollar Weakness Persists

• Euro Consolidates
• Japanese Yen Turning
• British Pound Soars
• Swiss Franc Unclear
• Canadian Dollar In C Wave
• Australian Dollar Takes Out .8000
• New Zealand Dollar Towards .7100

EURUSD – The dip that we were looking for to the 1.3280 area (1.3271 was the low today) has happened and we are looking for a rally to above 1.3344 in a 5th wave advance. The bullish structure remains intact as long as price remains above 1.3188 but channel support should be strong near 1.3250. Once a 5th wave is complete above 1.3344 (and possibly 1.3370), a major turn lower is expected.

USDJPY – We’ll reiterate our comments from yesterday. “We continue to favor the triangle scenario. The rally that began at 115.76 is likely the C wave of the triangle that could challenge 118.28 (116.24 + (117.80 – 115.76)). As long as the current rally ends before 118.51, the triangle structure is intact. After the C wave rally ends before 118.51, we are looking for a decline to triangle support in a D wave to around 116.50.” It is highly possible that the C wave of the triangle ended last night at 118.04 (also the 20 day SMA), so we are looking for a test of triangle support near 116.50.

GBPUSD – The Cable rally has extended past 1.9507 and tested the 78.6% of 1.9675-1.9184 at 1.9569. As long as price remains below 1.9675, the rally from 1.9184 can be classified as an A-B-C correction. However, the retracement is deep and price needs to turn lower very soon for a bearish outcome to remain favored. A rally above 1.9675 would suggest that the decline from 1.9915 was corrective and that price is headed to a new high (above 1.9915). The bullish structure remains intact as long as price remains above 1.9436.

USDCHF – The USDCHF pattern does not look clear at the moment. The pair has bounced off of the lower Bollinger band (daily) and resistance is at the 20 day SMA at 1.2220. Daily oscillators are divergent at the recent low, which is now healthy for the bearish case. With a possible 5 wave bearish sequence complete at 1.2030, a bounce could extend to the 38.2% of 1.2575-1.2030 at 1.2237. Again, the pattern is not clear at the moment and there is little confidence regarding directionality.

USDCAD – The USDCAD has plunged this morning. This type of price action is almost always a 3 or C wave. In this case, it is highly probable that the current decline is a C wave that will complete a 3 wave correction of the 1.1564-1.1828 rally. Support is at 1.1642, which is where the decline from 1.1790 will equal the 1.1828-1.1679 decline.

AUDUSD – We remarked yesterday that “the AUDUSD may be in the verge of breaking above long term resistance at .8003. Near term, the rally from .7798 is in 5 waves and 240 minute RSI is overbought and exhibits bearish divergence. A corrective setback may be in order before a serious challenge of .8003 occurs. The uptrend remains healthy as long as the 3/13 high at .7887 remains intact.” After slipping to .7963, the AUDUSD has rallied back above the .8000 figure and focus is on .8130 (see

NZDUSD – The Kiwi is strong and may be in a 3rd wave (or C wave) rally that began at .6943. In this case, we look for the NZDUSD to at least challenge .7116 (.6943 + (.7007 - .6833)) before a setback takes place. Remaining above .6943 is key for the near term bullish case.