EURUSD Correction Back to 1.4500 a Possibility
• Euro Larger Correction a Possibility
• Japanese Yen Consolidates Impulse Move
• British Pound Bearish Below 2.0101
• Swiss Franc 1.1371 Defines Trend
• Canadian Dollar Back to .9500
• Australian Dollar Wave 2 Correction Complete?
• New Zealand Dollar Still Looks Bearish
SEE A DECRIPTION AT THE BOTTOM OF THIS REPORT FOR THE INDICATORS IN THE TABLE
Join other traders in discussing Elliott Wave Theory on the DailyFX Forum.
Commentary: We presented the very bullish count on Friday; that had the rally from 1.4569 as wave 3 within the 5 wave advance from 1.4310. However, based on the structure of the decline from 1.4824, we favor what was an alternate scenario, which is in red on the chart. The rally to 1.4823 is now viewed as wave b of an expanded flat within larger wave 2 of the 5 wave rally that began from 1.4310. Minimum expectations are for the decline to come under 1.4569 before the next bull leg begins. Resistance should be strong near 1.4750.
Strategy: Exit bullish position and get bearish near 1.4730, against 1.4823, target TBD
Visit our recently updated Euro Currency Room for specific resources geared towards this currency.
Commentary: The count that we were focused on late last week had the USDJPY rallying higher; through 114.65 in order to complete a larger more complex correction from 107.20. However, with the argument strong that the decline from 114.65 is now in 5 waves, we must respect the bearish potential, which is great. 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. It is also possible that a small second wave correction is complete at 107.72. Subjectively speaking, we favor a rally to the 111.50 area (about the 50% retrace of 114.65-108.22) in order to complete wave 2.
Visit our recently updated Yen Currency Room for specific resources geared towards this currency.
Commentary: We maintain that “the decline from 2.0101 does not look complete. If the decline from 2.0101 is a 5th wave, then the fall should divide into 5 waves itself.” At this point, the decline from 2.0101 is not in 5 waves. Also, the short term EURUSD bearish bias favors additional GBPUSD losses. A measured objective is at 1.9525.
Strategy: Bearish, against 2.0101, target 1.9530
Visit our recently updated British Pound Currency Room for specific resources geared towards this currency.
Commentary: The bearish bias remains strong as long as the USDCHF is below 1.1371. The decline from 1.1371 is not especially clear itself but we are treating it as the beginning of the wave 3 decline within the 5 wave bear cycle from 1.1594. Very short term, the rally from 1.1018 is in 5 waves, so we do expect a bit more USDCHF strength (much like we expect short term EURUSD weakness). Look for resistance near 1.1300 (weekly pivot and Fibo resistance) in order to sell against 1.1371 for a drop to new multi decade lows.
Commentary: Either wave B within the A-B-C correction from 1.0248 (or wave 2 within a 1-2-3-4-5 impulse) is probably complete at 1.0080. We wrote Friday that “ptential resistance is at the 61.8% of 1.0248-.9755 at 1.0060. Look for a top and reversal in that area. The next bearish leg should challenge .9500.” The decline to at least .9500 is underway now.
Strategy: Bearish, against 1.0248, target .9500
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency.
Commentary: Last week, we wrote that “the correction from .9400 is either complete at .8749 or close to complete. We expect the next advance to exceed .9400 and possibly test 1.0000 in order to compete a large A-B-C advance of Cycle degree that began in 2001. Near term, the last part of wave 1 is ending as a diagonal which began at .8709. A decline to this level would complete wave 2.” The pair dropped to .8697 Friday before reversing higher. Wave 3 higher may be underway now. If not, then the next level of potential support is at .8664 (Fibonacci).
Strategy: Bullish against .8549, target above .9400
Commentary: The NZDUSD may be about to fall…and hard. The decline from .7937 to .7507 is a 5 wave decline and is either wave 1 down in a 5 wave bear cycle or wave A down in a 3 wave bear cycle (either way…a drop below .7507 is expected). The rally to .7791 is best counted as a 3 wave advance and the 61.8% retrace of .7937-.7507 has held twice.
Strategy: Bearish, from .7791, target below .7435
JTREND is a 4 week rolling pivot. When price is above the rolling pivot, the trend is considered bullish. When price is below the rolling pivot, the trend is considered bearish.
DAILY RSI uses 13 day RSI in order to gauge strength of trend. The trend is considered Bullish if the indicator registers a reading above 60. The trend is considered Bearish if the indicator registers a reading below 40. If the reading is between 40 and 60, then the reading is Flat.
DAILY STOCHS uses 13 day SLOW STOCHASTICS in order to gauge strength of trend. The trend is considered Bullish if the indicator registers a reading above 70. The trend is considered Bearish if the indicator registers a reading below 30. If the reading is between 30 and 70, then the reading is Flat.
200 day ?: Slope of the 200 day SMA