The market threw a curveball yesterday. The EURUSD broke below 1.5461 but the larger bullish bias is still valid as long as price is above 1.5283. The decline from 1.5817 is relabeled as a W-X-Y (complex) correction. The minimum bullish objective is one pip above 1.5817. “Even if a larger more complex correction is unfolding from 1.6018 (such as a flat or a triangle), price is still expected to exceed 1.5817.”
Visit our recently updated Euro Currency Room for specific resources geared towards this currency.
STRATEGY: Bullish, against 1.5283, target above 1.5817
The spike through 105.70 satisfies minimum expectations for wave Z. The short term USDJPY pattern strongly indicates that a top is in place (at least temporarily), so a bearish bias is warranted against 105.86.
Visit our recently updated Yen Currency Room for specific resources geared towards this currency.
STRATEGY: Bearish, against 105.86, target TBD
Similar to the EURUSD, the GBPUSD broke to multi-day lows yesterday but the larger bullish bias is intact as long as price is above 1.9362. Today’s low is at the confluence of the 78.6% of 1.9362-1.9850 / former resisting trendline (now support). Look for a low near current price.
Visit our recently updated British Pound Currency Room for specific resources geared towards this currency.
STRATEGY: Bullish, against 1.9362, target above 1.9850
There is little doubt that the advance from .9647 is corrective because a triangle separates the two legs. The only question is whether or not the rally from .9647 is a complete 3 wave rally or just the first wave of a larger more complex correction. Regardless, a bearish bias is warranted against 1.0527.
STRATEGY: Bearish, against 1.0527, target TBD
The USDCAD is working higher from the 78.6% of .9710-1.0324 at .9841. The push through .9997 is evidence that a low is in place. Risk can now be moved to .9823. Remember, the minimum objective is above 1.0324. The alternate (in red) is a triangle, so think about taking some longs off of the table near 1.0150/1.02. The rally from .9818 would be wave D of the triangle (to be followed by wave E lower and then a bullish breakout).
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency
STRATEGY: Bullish, against .9967, target above 1.0324
From a price structure point of view, the decline since the March top at .8215 has been choppy and corrective. The drop counts well as a double flat (this is a complex correction). Moreover, the legs of the decline are roughly equal (a common characteristic among corrections). The leg up from .7536 is the closest thing to an impulse that the NZDUSD has shown since the March top. As such, a bullish bias is warranted against .7536 (ideally price remains above .7767) and the target is above .8215.
STRATEGY: Bullish, against .7536, target above .8215
Tell us what you think about this report: contact the strategist about the article at jsaettele@dailyfx.com
[1] STRATEGY is a 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 throughout the week; these are published at separate articles at DailyFX.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.
