• Euro Triangle Intact • Japanese Yen Could See 108 • British Pound Forms Significant Low • Swiss Franc Headed to 1.05 • Canadian Dollar Headed Back to Parity • Australian Dollar .8880 Critical For Bears • New Zealand Dollar .7933 Critical For Bears
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. Look for resistance in the 1.4740 area for this leg of the triangle. 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. Strategy: Flat
Commentary: 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: We wrote yesterday that “the drop to 1.9337 might have formed a tradeable bottom. One count in the GBPUSD suggests that a multi-week low is in place as there are 5 waves down from 2.1160. Under this count, the decline from 2.1160 is either wave A or 1 in a 3 or 5 wave bear cycle. The pair is expected to rally in either wave B or 2.” Cable has rallied nicely and resistance is not until 1.9791 although bullish potential is much greater.
Strategy: Bullish, move risk to 1.9462 (from 1.9337), target TBD
Commentary: We still favor the idea that the USDCHF decline is extending as long as price is below 1.1122. The advance from 1.0836 to 1.1122 is clearly in 3 waves, indicating that the move is countertrend and that a new low will be registered. Be aware that the decline from 1.1122 is probably a 5th wave (of larger 3). An objective is where wave 5 equals 61.8% of waves 1 through 3 -- at 1.0553.
Strategy: Bearish, from 1.1122, target 1.0560
Commentary: We wrote yesterday that “weakness is expected to at least 1.0124 (1/15 low) -- which is defended by the 38.2% of .9755-1.0378 at 1.0140. We’ll look for an opportunity to get long near this support.” Well, the USDCAD has come into the mentioned support level. The decline from 1.0378 is probably a second wave and second waves are usually deep. Given that we expect USD weakness with other pairs, price coming down towards the 61.8% at .9993 seems reasonable. For now, stand aside.
Strategy: Flat
Commentary: Please see our special report on the AUDUSD from last week. The near term picture has been a mess recently….very choppy and difficult to manage risk. On the daily chart, the decline from .9400 could be the beginning of something much bigger (as discussed in the special report). This short term bearish count shown above is valid as long as price is below .8880.
Commentary: Our contention remains that the decline is not complete. Price needs to come at least under .7365 (wave A) before we can begin looking for a bottom. Also, the decline from .7933 is wave iii of C so even a corrective rally in wave iv will give way to lower prices. A potential terminus for the decline is the 61.8% of 6639-.7891 at .7118. The bearish is bias as long as price is below .7933. Strategy: Bearish now, against .7933, target TBD