Intraday moves are extremely violent right now. Watch the USDJPY as it sits just below the 107 figure. Such volatility often accompanies significant turns.
We advocated yesterday to take some profits off given the potential for a large decline in the EURUSD. Still, there is no evidence to suggest that the EURUSD rally is complete so we maintain a bullish bias. The preferred count treats the rally from 1.5364 as a third wave within the 5 wave advance from 1.5283. Under this count, targets are not until above 1.6018. The alternate treats the rally from 1.5364 as a C wave in either a flat or a triangle (in a triangle, the rally from 1.5364 is wave c of B); which probably ends no sooner than 1.59 (equality with wave A). In summary, remain bullish. The EURUSD has dropped below yesterday’s stop point, but we now have the opportunity to get bullish at a better price against 1.5364.
Visit our recently updated Euro Currency Room for specific resources geared towards this currency.
STRATEGY: Bullish, against 1.5364, target above 1.5834
There is no change to the USDJPY analysis. The pair has gone as far as it can go without forcing us to change the count that we have been following. “We expect a top to form in the USDJPY before 107.20.” Again, the rally from 95.72 is viewed as a triple combination correction (W-X-Y-X-Z); which itself is a larger 4th wave.
Visit our recently updated Yen Currency Room for specific resources geared towards this currency.
With 5 waves up from 1.9461 and a deep correction complete or very nearly so, an aggressive bullish bias is warranted against 1.9461. The minimum target is not until above 1.9850 although the rally likely continues to at least 2.0150/2.0200 to complete wave C of a triangle.
Visit our recently updated British Pound Currency Room for specific resources geared towards this currency.
STRATEGY: Bullish, against 1.9461, target above 1.9850 (likely near 2.02)
“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.” The story is the same as with the EURUSD and GBPUSD. It is a good idea to lighten up on position size at this juncture since it is possible that a larger correction is underway and the drop below 1.0214 satisfies minimum expectations for the second leg of the correction.
STRATEGY: Bearish, against 1.0408, target below .9647
The minimum objective that we have cited for some time is above 1.0324. However, the alternate (in red) commands a good deal of respect in this case given the USD bearish bias in the other pairs (alternate here is a triangle). This is why we mentioned the last few days to “think about taking some longs off of the table near 1.02.” There is no change to this strategy. In the case of the triangle, 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 (but lighten up on longs ahead of 1.0324 resistance)
The drop below .7536 negates the bullish bias that we had held. There is no rhyme or rhythm to the short term NZDUSD structure so we are standing aside completely until things clear up.
Tell us what you think about this report: contact the strategist about the article at [email protected]
