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.
• Euro Targeting 1.4800 • Japanese Yen Triangle? • British Pound Completing Wave A From 1.9337 • Swiss Franc 1.1122 is Critical • Canadian Dollar Towards Parity…Again • Australian Dollar Pattern Clearing Up • New Zealand Dollar Potential Resistance at .7835
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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. It appears that this leg of the triangle could extend. Potential resistance is at 1.4820 and 1.4900 (triangle resistance). 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. 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). Abother possible count is that a triangle is unfolding from 104.97 -- this count is gaining traction as the advance from 104.97 is in 3 waves (legs of triangles unfold in 3 waves). Strategy: Flat
Commentary: The decline from 2.1160 is wave A or 1 in a 3 or 5 wave bear cycle. The rally underway now is either wave B or 2. This countertrend rally should eventually challenge 2.0100 and maybe 2.0463 (61.8%). Since the advance is viewed as a countertrend rally, it should unfold in 3 waves (A-B-C) The rally underway now is wave A of that rally and potential resistance is the 161.8% extension of 1.9337-1.9644/1.9464 at 1.9960. Exceeding 1.9876 would complete wave A, after which a decline in wave B is expected.
Strategy: Bullish, against 1.9462, target 1.9940
Commentary: On Friday, we wrote that “we still favor the idea that the USDCHF decline is extending as long as price is below 1.1122. Potential resistance for the rally from 1.0846 is at 1.1016 (61.8% of 1.1122-1.0846). The bias is bearish as long as price is below 1.1122.” The pair rolled over from just below 1.1000, but 1.1122 remains the critical bearish ‘line in the sand’. 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: Bearish, against 1.1122, target 1.0560
Commentary: We wrote Friday that “near term, potential resistance is at 1.0128. If the rally from 1.0012 fails and gives way to a drop below 1.0012, then there would be 5 waves down from 1.0378. Expectations then would be for a corrective rally that we would look to sell into.” This scenario seems to be playing out as the high this morning was at 1.0117. The USDCAD should drop below 1.0012 before a countertrend rally brings price back to at least 1.0117.
Strategy: Flat
Commentary: The near term picture has been unclear for the past few months -- which is a strong indication that the AUDUSD has been stuck in a corrective pattern. Corrections are often diccicult to count. If price exceeds .8853 (which is very close to current price), then the pattern would be cleared up and we would be confident adopting a bullish bias AFTER a corrective decline that brings price back to .8700/65.
Strategy: Flat (pattern is clearing up though)
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. Near term, the advance from .7383 is not impulsive, which supports the bearish bias. Potential resistance is at .7835. Strategy: Bearish now, against .7933, target TBD