Expect a drop below 1.5783 in the EURUSD either tomorrow or Thursday in order to complete a small correction. The USDCAD has formed a base since 7/15 and traders should begin preparing for the breakout above 1.0378 that is expected in the next few weeks.
We are longer term bullish against 1.5611 but expect a drop below 1.5783 in order to complete a 2nd wave correction from 1.6039. While the decline from 1.6039-1.5783 is in 3 waves, the rally from 1.5783 does not count well as an impulse. What tips our hand is the portion that is labeled wave a of X, which is in 3 waves and therefore corrective. Longer term traders should remain bullish against 1.5611 while short term traders can try the short side (keep in mind that shorting here is going against the larger established trend).
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STRATEGY: Bullish, against 1.5611, targets 1.6325 and above
The USDJPY has traded sideways since last week, which does not fit with our call for a sharp drop in a 3rd wave; which should have happened by now if this outlook were correct. Similarly, the rally from 103.76 looks impulsive and the preceding decline is clearly in 3 waves (to this point). There is very little confidence in the downside.
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STRATEGY: Bearish, against 107.75, targets 101.97 and below
Wave C of a triangle may be complete at 2.0156 and wave D could be underway now. However, we favor the count that treats the advance from 1.9364 as wave C of a flat, which will not end until above 2.04. The red line on this chart is the 200 day SMA, which the GBPUSD is holding above. Keep risk at 1.9810 and look for support near 1.9875
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STRATEGY: Bullish, against 1.9810, target TBD
The short term picture remains clouded. The rally from .9647 is in 3 waves and that since early May the USDCHF has made a series of lower highs. This evidence is bearish. Very short term, expect a push through 1.0258 and maybe even 1.0352.
Wave E may be complete. E waves (as we’ve written here often) are usually sharp and the decline has accelerated. The USDCAD has formed a base from the 7/15 low and a bullish bias is warranted against .9818. This is to prepare for the breakout above 1.0378 that is expected in the coming weeks.
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A cautious bullish bias remains warranted against .9677 since the advance from there could the first impulse of the next bullish cycle. Look for support near .9720 (61.8%).
The NZDUSD fell sharply yesterday but a drop below .7587 is required in order to make the decline from .7761 an impulse and suggest that the trend has turned back down. Until then, gains (albeit correctively) are still possible.