Euro Fails at 1.3000?Again
Japanese Yen May Finally Rally
British Pound Shifty at Top of Recent Range
Swiss Franc Tracing out a 4th Wave?
Canadian Dollar Needs One More Low
Australian Dollar Turns at .7900
New Zealand Dollar Little Changed
EURUSD We maintain that the decline from 1.3296 is impulsive and the fact that we can count 5 waves from 1.1640 to 1.3367 favors a major turn lower. A break below 1.2865 targets the next bearish target at 1.2708 (38.2% of 1.1640-1.3367). Near term rallies have been uninspiring but resistance should cap gains near the 12/18 low at 1.3051. This is in-between the 38.2% and 50% fibos of 1.3296-1.2965 (1.3029-1.3080).
USDJPY We still maintain our position regarding the longer term implications from the 13 month inverse head and shoulders pattern. A measured objective is at 128.67 which is where the advance from 108.96 would equal the advance from 101.67 to 121.38. The pair exceeded 121.38 yesterday to trade at a nearly 4 year high (121.58 intraday high yesterday). Near term, we still look for a corrective move lower. Looking at the 240 minute chart, there are 5 waves up from 117.97, so a corrective setback is reasonable. The 38.2% of 117.97-121.58 is at 120.20, which is also just above the 4th wave extreme of one lesser degree at 120.05.
GBPUSD We focused last week on how much more constructive Cable was compared to the EURUSD. The pair has turned up in what looks like an extended 3rd of the 5th wave to complete the bullish sequence from 1.8515 (and the bullish sequence of one larger degree from 1.7046). Thus, price is expected to exceed 1.9846 before a major correction takes place. In the short term, price has traced out 5 waves from 1.9315 (the preferred count has this as the 3rd of the 5th). The pair has turned down from 1.9777 in what is likely a 4th wave correction. The 38.2% of 1.9315-1.9777 is at 1.9601, which also is just above the 4th wave extreme of one lesser degree at 1.9589. Traditional technical tools also favor a setback with 240 minute RSI declining from above 70. In summary, it looks like we can expect a correction to near the 1.9600 figure followed by a rally through 1.9846 that would complete a 5 wave bullish sequence from 1.7046.
USDCHF The USDCHF has ranged this past week and digested the strong rally from 1.2110. This consolidation looks like the beginning of a 4th wave correction that will eventually give way to a 5th wave advance. Support is at the 1/16 low at 1.2416 and the 38.2% of 1.2110-1.2546 at 1.2380. Once 1.2546 is broken, bullish targets lie at Fibonacci extensions of 1.1878-1.2271 / 1.2110. The 138.2% and 161.8% extensions are at 1.2653 and 1.2746 . This fits well with the 10/13 high at 1.2769.
USDCAD A potential resisting line from a 2+ year bearish channel is at 1.1840 today. The 50% of 1.2731-1.0927 is at 1.1830. Further, the 1.618% extension of 1.0927-1.1456 / 1.1028 is at 1.1883. This area 1.1830 to 1.1883 is an ideal topping area for the USDCAD before the pair resumes its longer term downtrend to below 1.0927. A drop below 1.1644 would grant confidence the bearish case.
AUDUSD At this point, the rally from .7759 looks rather corrective and has stalled prior to the 61.8% of .7979-.7759 at .7895. With the 5 waves up from .7413 to .7979 a 3 wave corrective setback is favored. That 3 wave setback may have already occurred with the decline to .7759. Another scenario is possible though. The decline from .7979 to .7759 may be the first of these corrective waves and the advance from .7759 to .7888 is the 2nd. A third wave within the correction would imply a decline below .7759 to near where a = c. That level would be .7685 very close to the 50% of .7413-.7979 at .7695. A rally through the high from today at .7905 would lend confidence to the original interpretation that the pair is working higher from .7759.
NZDUSD Kiwi has been stationary today. The rally from .6840 looks like a bearish flag that is correcting the decline from .7096 to .6840. The turn lower on 1/6 from the 50% of .7096-.6840 at .6969 implies that the next leg may have already started. In this instance, a break of .6840 is expected near term. If .6974 (1/16 high) is exceeded, then focus shifts to the 61.8% of .7096-.6840 at .6999.
