We have altered the count slightly but there is very little change to the outlook for lower prices. A 3rd wave advance is most likely complete at .8097. The .81 level is round number resistance and Thursday’s top occurred right at a nearly 7 month resistance line. Expect the EURGBP to reach at least .7762 in the coming months (23.6% of .6679-.8097) and possible the 38.2% at .7555.
We wrote last week that “the rally from 1.5326 will likely reach at least 1.6075-1.6253 (50% to 61.8% of 1.6827-1.5326). One possibility is that the rally from 1.5326 is unfolding as a double zigzag. The second zigzag would equal the first at 1.6102; which is close to the 50% level. In summary, the short term trend is bullish as long as price is above 1.5653, and resistance should be strong near 1.61.” The high Friday was at 1.6163, so an important secondary top may be in place. If price does exceed 1.6163, then expect resistance at 1.6253.
5 waves up from 1.4410 makes it clear that the larger trend is up but a countertrend correction is probably still in progress. Expect the EURCAD to come under 1.5702 and test the 1.5633/1.5593 zone. Wave C would equal wave A at 1.5633 and 1.5593 is the 38.2% of 1.4410-1.6324.
The EURAUD needs to drop below 1.6743 before we can proclaim that the correction from 1.7253 is complete. Support should be strong just below this level; at the 50% of 1.5922-1.7253 at 1.6588 and the 61.8% at 1.6431. The pair 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.
Similar to the EURAUD, the long term EURNZD picture is extremely bullish. Price is expected to eventually exceed 2.1187. Near term, expect a dip to the 1.9623-1.9466 zone for an opportunity to get bullish against 1.8957.
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.
Monday: EURGBP, EURCHF, EURCAD, EURAUD, EURNZD
Tuesday: EURJPY, GBPJPY, CHFJPY, CADJPY, AUDJPY, NZDJPY
Wednesday: GBPCHF, GBPCAD, GBPAUD, GBPNZD
Thursday: AUDCHF, AUDCAD, AUDNZD