A drop below 1.5611 (EURUSD) would boost confidence in our bearish position. The USDCAD is preparing to break from a 6 month triangle (higher). The break should be violent.
If wave C of an expanded flat that began at 1.6018 is underway, then price will remain below 1.5944. The rally from 1.5628 is wave ii of 3 of C and is either complete at 1.5768 or will push a bit higher towards measured resistance at 1.5792 (which is also former congestion). The ultimate objective is not until below 1.5283. Trading below 1.5611 would boost confidence in the bearish bias.
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STRATEGY: Bearish, against 1.5944, target below 1.5283
Preferred count: The advance from 95.72 is wave W in a W-X-Y complex correction and the drop from 108.57-103.76 is wave X. Wave Y is underway towards 116 (equality with wave W). Alternate: price action from 108.57 is forming a triangle in wave X. The best strategy is to play a bullish break. Look for support in the 107.15/33 area (Fibo zone).
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STRATEGY: Bullish, against 106.58, target above 108.57
We wrote yesterday that “the GBPUSD tested and held the trendline drawn off of the 6/13, 7/7, and 7/8 lows. Still, it is likely that wave D of the triangle is underway towards 1.9550/1.96. This is our stance as long as price is below 2.0075.” Cable has drifted lower and is now below the mentioned former support line. There is no change to the outlook for a wave D decline to end near 1.9550/1.96.
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The USDCHF has broken above a channel that had held since early May. Under the preferred count, the 3 wave rally from .9647 was wave W in a complex correction. The choppy decline from above 1.06 serves as wave X and wave Y is underway now. Expect the advance to reach 1.10 (former 4th wave and wave Y = wave W at 1.0986).
The USDCAD is preparing to break out from its 6 month triangle. This bullish break will complete a 3 wave corrective advance from .9055. Objectives are in the 1.05-1.08 zone. We’ll look to identify support and lessen risk as the advance matures.
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STRATEGY: Bullish, against .9974, target above 1.0378
The NZDUSD continues to weaken and most likely will over the next several months. Our longer term objective is not until below .5927. However, there will be countertrend movements along the way. We’ll look to identify completion of those rallies and take advantage of the current downtrend. As of now, resistance is just below .75.
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