The EURUSD decline is getting awfully deep for a correction; which has us thinking that it may not be a correction. 1.5611 still remains key for bulls. We've proposed an alternate count that has very bearish implications.
The preferred count that we have been tracking is in black and is valid as long as price is above 1.5611 (red horizontal line). BUT, given the extended weakness from 1.5944 (well beyond where the decline would equal the 1.6039-1.5783 drop), presentation of an alternate count is warranted. While the preferred still treats wave IV as a triangle (complete at 1.5468), the alternate (in red) treats the correction from 1.6018 as a flat. Wave C of the flat would be underway now and would not end until below 1.5283. Near term resistance is 1.5700/36.
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STRATEGY: Bullish, against 1.5611, EXIT AT 1.57 (if given the chance) and FLIP to Bearish against 1.5797
We put forth a possibility yesterday for the USDJPY, mentioning that a triangle could be unfolding in the X wave position from 108.57 (this means that the rally from 95.72-108.57 is wave W). If a triangle is unfolding, then the pair should decline in wave c soon. Range trading would dominate for the next few weeks before a bullish break.
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The drop below 1.99 negates the short term bullish bias. The GBPUSD is currently testing the trendline drawn off of the 6/13, 7/7, and 7/8 lows. A clean break of this line would confirm that wave D of the larger triangle is underway towards 1.9550/1.96. Look for resistance near 1.99 (former support).
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It is looking now as though 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 and will end above 1.0624. Near term support is at 1.0350.
Wave E may be complete. The USDCAD has formed a base from the 7/15 low and a bullish bias is warranted against .9818. This is to prepare for the breakout above 1.0378 that is expected in the coming weeks.
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STRATEGY: Bullish, against .9818, target above 1.0378
We wrote yesterday that “the NZDUSD continues to fall and is likely in a 3rd wave down. A break of .7445 would confirm that speculation.” The pair broke the level and is headed much lower in the coming weeks. Targets are at .7280 and .6990 (the long term target is not until below .5927). Resistance is in the .7450/.7500 zone.
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