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The cleanest short term pattern is the GBPUSD 5 wave rally from 1.6775.  The pair has retraced about 61.8% of that advance.  This is the area that is likely to produce a bottom.

The EURUSD remains in the middle of the recent range and only a break below 1.3250 or above 1.3785 is going to provide a clear direction.  Long term momentum is clearly down but I don’t see a safe short entry at this near this level.  Those willing to take on risk can try the short side against 1.3688.  The next long term support is the 2007 low at 1.2865.  A potential inverse head and shoulders could lead to a bullish reversal.  

Remaining below 103.10 keeps the longer term bearish count intact in which the USDJPY will accelerate lower and drop below 95.72.  Be sure to view the long term USDJPY wave count, which you may find shocking (at how bearish I am).  Yen crosses are volatile but present opportunities.

I wrote in these pages yesterday that “the rally from 1.6775 is an impulse (5 waves) and a corrective decline from 1.7635 may be complete at 1.7375.”  Assuming that the correction was done at 1.7375 was clearly wrong now that the GBPUSD has dropped below there.  The pair did come close to the 61.8% of the advance from 1.6775, so Cable is in the area that is likely to produce a bottom.    

Nothing has changed regarding the USDCHF.  “5 waves up from 1.0686 and 3 waves down to former support is bullish for the USDCHF.  The alternate is still bullish, but the next leg up would not occur until a drop below 1.1125 that completes a larger correction from 1.1493.”  With the failed break above 1.1493 today, this may be a good time to take a stab at the short side.   

As long as the USDCAD is above the trendline from late September, bulls are in control.  Coming under the line would give scope to further weakness to complete an A-B-C decline from 1.2120 that would probably end in the 1.0962-1.1176 zone.

The drop below .6809 negated the bullish bias and confirms that the advance from .6328 is indeed corrective and in all likelihood will be fully retraced (eventually).  It is just as probable that a flat or triangle is underway, in which case, price could continue higher from above or very slightly below .6326.  

With 5 waves potentially complete from above .82, a correction should reach the former 4th wave (defended by the 50%) at .70.  The advance could accelerate in the coming days.

Jamie Saettele writes Forex Technicals: The Day Ahead, Monday-Thursday (published at 6 pm EST), Daily Technicals every weekday morning (9 am EST), COT analysis (published Monday mornings), and analysis of currency crosses throughout the week.  He is also the author of Sentiment in the Forex Market.