• Euro Ready to Challenge 1.4300? • Japanese Yen Working Towards Trendline • British Pound Drops Below 200 day SMA • Swiss Franc To Push Through 1.1574 Before Reversing • Canadian Dollar In Deeper Correction • Australian Dollar Nears 200 day SMA • New Zealand Dollar Small 2nd Wave Correction To Present Bearish Opportunity
Commentary: It is still possible that the EURUSD challenges congestion near 1.4452 before the pair reverses and drops to a new low (below 1.4330). However, the EURUSD may drop below 1.4330 without first challenging 1.4452 and complete wave C (and larger wave 4) of the A-B-C decline from 1.4967. A potential terminus for the decline is where wave C = wave A at 1.4309. The next 5 to 6 weeks should see larger wave 5 exceed 1.5000. Strategy: Flat
Commentary: Wave c of the a-b-c correction from 107.20 remains in progress. The next level of potential resistance is the 61.8% of 117.93-107.20 at 113.83, followed by a potential resisting trendline just above 114.00 and then the 78.6% retrace level at 115.63. The rally from 107.20 is wave 2 of larger 3 within the 5 wave bearish cycle from 124.13. While potential does remain for a push to the mentioned resistance levels, the USDJPY is setting up for a major decline. Strategy: Flat
Commentary: Cable has broken below the confluence of long term channel support and the 200 day SMA. We wrote yesterday that “if price slips below the confluence of the 200 day SMA/channel support then potential support is at the 100% extension of 2.1160-2.0353/2.0831 at 2.0024.” The GBPUSD is very close to that level right now. If an impulsive decline is unfolding from 2.1160, then the decline should accelerate in the next few days in a third of a third wave down. If we see 5 waves down on the daily, then we will get an opportunity sell the wave 2 correction that ensues. Those that wish to begin bearish operations now should look for resistance in the 2.0230 area.
Strategy: Flat Commentary: The USDCHF is closing in on the 100% extension of 1.0886-1.1327-1.1153 at 1.1594. Given the outlook for bottoms to form in the EURUSD and GBPUSD over the next week or so, we expect a top in the USDCHF near 1.1594. This level was former support as well; and could now be resistance. Near term, the rally from 1.1153 (which we are treating as wave C), needs a push through 1.1574 in order to complete 5 waves. Strategy: Flat Commentary: We are still waiting to see if the USDCAD completes 5 waves down from 1.0248. If the USDCAD drops below 1.0026, then the pair will have completed 5 waves lower from the top (1.0248). Under this scenario, we expect price to correctively rally back towards 1.0140. This would offer an opportunity to get aggressively bearish against 1.0248 for a much larger decline.
Strategy: Flat Commentary: The AUDUSD continues to slide and is likely to continue lower until at least a support shelf which begins with the 200 day SMA at .8517. The next potential support levels are the 61.8% of .7670-.9400 at .8331. We will look for a bottom and reversal near there.
Strategy: Flat Commentary: We favor the idea that an expanded flat is unfolding (wave b exceeds top of wave v). Wave c of the flat is underway and price must come under .7435 before we can begin to look for a bottom. Near term, wave i of C looks complete.7507. As such, expect a corrective setback to end in the .7671/.7773 zone (38.2% -61.8% of .7937-.7507). Strategy: Get bearish in .7671/.7773 zone, against .7937, target below .7435