• Euro Short Term Top in Place? • Japanese Yen Should See Mid 108s • British Pound Rejected at 1.9950 • Swiss Franc Larger Correction Underway • Canadian Dollar Extending Gains (USDCAD Losses) • Australian Dollar Rolling Over Near Term • New Zealand Dollar Same as Aussie
Commentary: The triangle is playing out as expected. The rally from 1.4365 is viewed as wave d within the a-b-c-d-e triangle and could be complete. Potential resistance is at 1.4820 and 1.4900 (triangle resistance), although it is possible that wave d of the triangle is complete now at 1.4819. The next leg of the triangle will be lower in wave e in order to complete larger wave 4 before the thrust higher in wave 5 through 1.50. Look to get bullish near 1.4500, against 1.4310, for a run at the mid 1.50’s. The time sequence of the triangle favors the idea that wave d is complete or very close to complete. The first leg of the triangle took 20 days, the next leg 17 days, this leg would be 6 days today…so a top today or tomorrow seems reasonable. This time sequence would lead to a low that we look to buy in wave e sometime late next week. Strategy: Flat
Commentary: We still maintain that the strong rally from 104.97 is probably a c wave that will complete a larger second wave as an expanded flat. If this count is correct, then price is expected to exceed 107.92 and resistance should be strong in the 108.33 area. We will look to return to a bearish bias following a rally through 107.92 (against 110.11) for a drop to our objectives that are below 100 (near 97). Strategy: Flat
Commentary: Yesterday we wrote that “we view the entire decline from 2.1160 as wave 1 or A in a 5 or 3 wave bear cycle. Therefore the rally from 1.9337 is viewed as wave A of the 3 wave countertrend rally. Look for price to come into the 1.9563/1.9702 zone before another rally completes the correction sequence from 1.9337.” A top for wave A might be in place at 1.9949. Wave 5 of A appears to take the form of a diagonal (overlapping waves) and diagonals are usually fully retraced. In this case, the origin of the diagonal is close to the 38.2% of 1.9337-1.9949 at 1.9715. The next move is towards this level -- we will look to buy this dip.
Strategy: Flat
Commentary: The bias is bearish as long as price is below 1.1122 but it is possible that we see a push through 1.0988 in order to complete an expanded flat. Bigger picture, the decline from 1.1122 is probably a 5th wave (of larger 3) and an objective is where wave 5 equals 61.8% of waves 1 through 3 -- at 1.0553.
Strategy: Exit bearish position
Commentary: The scenario that we have described recently is playing out. Expectations are for a corrective rally that we will look to sell into. The drop below 1.0012 does complete 5 waves down from 1.0378 and the mentioned corrective advance is expected to begin soon and bring price back to at least 1.0117 in what is either a 2nd wave or B wave.
Commentary: 5 waves up from .8512 are very close to complete so expect a multi-day corrective decline to begin soon that brings price back to the .8750 level. This will present a buying opportunity for the run to the mid .90s.
Commentary: The NZDUSD is in the exact same position as the AUDUSD and GBPUSD and USDCAD (but inverse). Given that the GBPUSD, USDCAD, and AUDUSD all show clear 5 wave moves towards dollar weakness -- and that a countertrend 3 wave dollar rally is expected across the board, it is reasonable to expect a NZDUSD drop to at least .7639 (38.2% of .7383-.7796) or .7663 (structural support) before the next advance. Strategy: Bearish, against .7933, EXIT near .7700