The EURUSD bias is bearish as long as price is below 1.5643. Potential trendline resistance is near 1.55 and short term resistance extends to 1.5650.
Last week, we wrote that “the EURUSD did make one more high (slightly) at 1.6018 but the large 4th wave correction that we expected is underway. The Fibonacci support zone does not begin until 1.4667.” Since 1.6018, the EURUSD has fallen like a rock. Rallies should proved corrective (see short term chart) and the bearish objective is not until below 1.50. The drop from 1.6018 is probably a 4th wave within the 5 wave advance from 1.1640. Measured support does not begin until 1.4668 (38.2% fibo).
Visit our recently updated Euro Currency Room for specific resources geared towards this currency.
We are bearish as long as the EURUSD is below 1.5643. Potential trendline resistance surrounds the 1.55 figure and chart resistance from a former congestion zone extends to 1.5546. A short term bearish target is at 1.5230.
STRATEGY: Bearish, against 1.5643, target below 1.5342
Visit our recently updated Euro Currency Room for specific resources geared towards this currency.
Catching 5th waves can be difficult sometimes so we are focusing on the big picture. The USDJPY count that treats the rally from 95.72 as a 4th wave is valid as long as 107.20 remains intact. There is a 50% Fibo at 105.18, which coincides with the lower region of a congestion zone. See our Yen and Stocks report from Friday for additional insight.
Visit our recently updated Yen Currency Room for specific resources geared towards this currency.
The structure of the rally from 95.72 is evidence that the larger trend remains down. The advance consists of overlapping waves and can be counted as a double zigzag (W-X-Y); which is two 3 wave segments connected by an X wave. We’ll be looking to confirm a top this week.
Visit our recently updated Yen Currency Room for specific resources geared towards this currency.
The GBPUSD declined in 5 waves from 2.1160, indicating that a significant top is in place. The 5 wave decline is viewed as either wave 1 in a 5 wave bear cycle or wave A in a 3 wave bear cycle. In other words, longer term bearish potential is great. The rally from 1.9337 is either wave 2 or B and is complete at 2.0396. The decline should accelerate this week or next if a 3rd wave lower is underway. The alternate is still longer term bearish but treats the decline from 2.0396 as wave X in a complex correction.
Visit our recently updated British Pound Currency Room for specific resources geared towards this currency.
We are treating the drop from 2.0396 as a leading diagonal (wave 1 of C within the A-B-C decline from 2.1160). Under this interpretation, the GBPUSD rally from 1.9599 is wave 2 within the 5 wave drop (wave C) from 2.0396. However, the decline from 2.0025 is choppy and may be a correction. Until proven wrong (which requires a rally through 1.9909), we are sticking with the bearish bias. A resistance line from mid-March has held and keeps bears in control.
Visit our recently updated British Pound Currency Room for specific resources geared towards this currency.
STRATEGY: Bearish, against 1.9909, target below 1.9337
The drop from 1.1105 was wave 5 within a 5 wave drop from 1.3295. Under this count, a major low is in place and the USDCHF is working higher towards Fibo resistance; which does not begin until 1.0840. Former support at 1.0728 may provide resistance as well.
We favor the upside but the short term wave count is not clear. The USDCHF may be forming a channel and the resistance line is near 1.0650 today. Support should be strong near 1.0464 and the short term bias is bullish as long as price is above 1.0300.
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency.
We remain aggressive USDCAD bulls as advances since the .9055 low are in 5 waves and declines are in 3 waves. Near term, price should remain above .9998 and we will not even think about an objective until the pair has exceeded 1.0324. Near term, the rally from 1.0037 is in 5 waves and may be wave i of a bull cycle. Short term support is at 1.0115/40.
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency
STRATEGY: Bullish, against 1.0037, target above 1.0324
The break of a support line drawn off of the 8/17/07 and 1/22/08 lows strongly suggests that the wave C decline has started. The long term count calls for this C wave to eventually end below .5927.
Our preferred count has been that a 1st wave down from .8215 is a leading diagonal and a wave 2 bounce ended at .8033. The NZDUSD has dropped below .7781, which makes a strong case that a 3rd wave decline is underway. Keep risk at .7879.
STRATEGY: Bearish, against .7879, target TBD
Tell us what you think about this report: contact the strategist about the article at jsaettele@dailyfx.com
STRATEGY is a quick summary of our best technical ideas. The ideas are subjective and are subject to change everyday although trades are typically held for at least a few days and sometimes a few weeks or more. Ideas are also included for crosses throughtout the week; these are published at separate articles at DailyFX.
TREND ANALYSIS is based on a rolling pivot model. LONG TERM TREND is determined by the last 3 months of price data (high, low, close). SHORT TERM TREND is determined by the last 4 weeks of price data (high, low, close). R3, R2, R1, PL, PH, S1, S2, and S3 are provided to aid in identifying entries and exits. These are objective measures and our subjective analysis (STRATEGY) may differ.
ELLIOTT WAVE VIEW is our assessment of both the longer term (DAILY BARS) and shorter term (60 MINUTE BARS) EW structure. This is the basis for our STRATEGY.