Now is the time to position for bullish breakouts in a number of Euro crosses. The EURGBP, EURCHF, and EURAUD are present the best opportunities.
Since the April high (.8096), the EURGBP has been stuck in a sideways correction (most likely a triangle). Such consolidations are usually continuation patterns, so we expect a break to the upside before a major top forms.
The bullish EURCHF count remain favored. “The 1.5326-1.6376 rally is in 5 waves, therefore expectations are for a similar 5 wave rally to succeed the corrective decline from 1.6376.” A bullish bias is warranted against 1.5991.
Longer term, there is no change to the call for a push through 1.6324. Near term, the rally from 1.5278 is not clearly impulsive and it is possible that price action since the March top at 1.6324 is unfolding as a triangle or flat. Expect the range to tighten going forward if a triangle is underway. As mentioned, a thrust through 1.6324 is still expected; the triangle just delays the move.
Since August 2007, the EURAUD has traded in a tightening range, but with a bullish bias. The higher lows since 1.5491 and the multiple tests of resistance just shy of 1.75 favor a bullish break soon. Fibo support extends to 1.6643 short term. Now is the time to position for a break through 1.75.
The EURNZD is showing signs that it may have put in a major top. A drop below 2.0548 would make the drop from 2.1854 in 5 waves. A corrective advance should then follow. In summary, the EURNZD should remain supported for the next few weeks (after a dip below 2.0548).
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