The USD rally has accelerated but expect a countertrend move (USD decline) that brings the EURUSD back to at least 1.5615.
The drop below 1.5611 significantly increases confidence in the bearish outlook. “If wave C of an expanded flat that began at 1.6018 is underway, then the ultimate objective is not until below 1.5283.” Near term, expect a bounce to at least 1.5615. There are 2 counts that we are following (both treat the decline from 1.6039 as wave C that will not end until below 1.5283). The first is that wave 3 of C is underway from 1.5768. If correct, price will remain below there. The other count is that wave 1 of C is complete (or very nearly so) and that wave 2 will bring the EURUSD back to 1.58 or so before the decline continues.
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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. Expect 108.57 to give way next week, if not this week. Move risk to 107.69.
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STRATEGY: Bullish, against 107.69, target above 108.57
There is no change to the near term GBPUSD bearish outlook. “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.” Very short term, a push above 1.9843 would potentially complete an expanded flat. Look for resistance above 1.9850.
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There is also no change to the bullish USDCHF count. “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).” Near term support is at 1.0440.
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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