• Euro Wave 3 of 3 Underway to 1.5300
• Japanese Yen Testing 107.20
• British Pound Forming a Bottom?
• Swiss Franc Same as Euro
• Canadian Dollar Unclear
• Australian Dollar Wave 3 Underway to at least .9600
• New Zealand Dollar Diagonal?
SEE A DESCRIPTION AT THE BOTTOM OF THIS REPORT FOR THE INDICATORS IN THE TABLE
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Commentary: We were correct in flipping to a bullish stance on Friday near 1.4650. There is still a slight possibility that a triangle is unfolding as larger wave 4 from 1.4966 but the surge from 1.4640 is characteristic of a 3rd wave. In this case, the advance would be a 3rd of a 3rd wave (of larger 5). The bullish bias is strong as long as price is above 1.4569. Measured objectives are near 1.5200/1.5300.
Strategy: Bullish, against 1.4569, target TBD
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Commentary: We must respect the bearish potential, which is great because the decline fom 114.65 could be the beginning of wave 3 of larger 3 within the 5 wave bear cycle from 124.13. A break below 107.20 warrants a breakout strategy. Subjectively speaking, we favor a rally to exceed 110.11 as an expanded flat before the next bearish leg. If the decline from 110.11 unfolds in 5 waves, then we will get bearish on the setback.
Strategy: Flat
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Commentary: Near term price action does suggest that Cable decline extending. “The decline from 2.0101 is in its 3rd wave and has the potential to 1.9119, which happens to intersect with the March lows of 2007 at 1.9182. This bearish bias holds as long as price is below 1.9848.” A drop below 1.9483 would possibly complete a diagonal from 2.0101 and give way to a violent upward reversal. See our special report from Friday at Cable.
Strategy: Bearish, against 1.9848, move target to 1.9450
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Commentary: The USDCHF count is the same as the EURUSD count, but flipped over. That is, the decline from 1.1594 is viewed as wave 1 within a 5 wave bear cycle and wave 2 is the rally to 1.1190. Wave 3 lower is underway now and a bearish bias is warranted as long as price is below 1.1190. Wave 1 of 3 is possibly complete at 1.0884 and a corrective rally could test the former 4th wave congestion at 1.0975/1.1047 before a more pronounced decline unfolds.
Strategy: Flat
Commentary: We are not too confident in the bearish USDCAD bias right now. Previously, we wrote that “either wave B within the A-B-C correction from 1.0248 (or wave 2 within a 1-2-3-4-5 impulse) is complete or close to complete at 1.0080. Even if price does exceed 1.0080, the next move of consequence is lower towards .9500. The bearish bias is strong as long as price is below 1.0248.” The alternate bullish count treats the rally from .9841 as wave 3 instead of c, which means that the rally could accelerate.
Strategy: Bearish, against 1.0248, target .9500
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Commentary: Wave 3 within the 5 wave bull cycle from .8584 is underway. Ultimately, we expect this rally to lead to the completion of the entire rally from 2001. Objectives are in the .9600-1.0000 zone. We wrote Friday that “support should be strong near .8900.” The low Friday was at .8890 and the pair has vaulted higher. Again, resistance should be strong near .8890…the bullish bias is strong as long as price is above .8682.
Strategy: Bullish, against .8682, target TBD
Commentary: Kiwi has simply exploded higher and is on the verge of taking out the December high at .7937. Our bearish bias was proved wrong but we are not comfortable adopting a bullish bias at the current juncture as the pair presses against resistance. One count treats the entire rally from .7365 as an ending diagonal -- which would be considered complete following a rally through .7937.
Strategy: Flat
