Expect the EURGBP to reach the former 4th wave congestion zone (.7391-.7612) over the next few weeks. Near term, there is a resistance line just above today’s high and a series of lower highs and lows since the high in mid-April. Stay bearish against .7947.
The decline from the October 2007 high was in 5 waves and the sharp advance from March 17 low consists of 3 waves (a-b-c). Waves a and c are equal at today’s high so expect a top and reversal near current price.
The EURCAD is tracking our preferred count. “5 waves up from 1.4410 makes it clear that the larger trend is up.” 1.5618 is very close to where wave C would equal wave A (1.5633) but there is no indication that the drop is complete. Look for support near 1.5593 (38.2% of 1.4410-1.6324) and 1.5459 (3/19 low).
The EURAUD is considered to be in the early stages of a long term (multi month and maybe even multi year) bull trend as long as price is above 1.5922. The decline from 1.7426 is a c wave and should unfold in 5 waves. To this point, the decline is in 3 waves so expect some consolidation and then a drop that may test the 78.6% of 1.5922-1.7253 at 1.6207.
The EURNZD is expected to eventually exceed 2.1187. We wrote last week that “near term, expect a dip to the 1.9623-1.9466 zone for an opportunity to get bullish against 1.8957.” That dip is underway now.
Tell us what you think about this report: contact the strategist about the article at jsaettele@dailyfx.com TREND ANALYSIS is based on a rolling pivot model. LONG TERM TREND is determined by the last 3 months of price data (high, low, close). SHORT TERM TREND is determined by the last 4 weeks of price data (high, low, close). R3, R2, R1, PL, PH, S1, S2, and S3 are provided to aid in identifying entries and exits. These are objective measures and our subjective analysis (STRATEGY) may differ. SCHEDULE Monday: EURGBP, EURCHF, EURCAD, EURAUD, EURNZD Tuesday: EURJPY, GBPJPY, CHFJPY, CADJPY, AUDJPY, NZDJPY Wednesday: GBPCHF, GBPCAD, GBPAUD, GBPNZD Thursday: AUDCHF, AUDCAD, AUDNZD