Another day and another record high in the EURUSD. Evidence continues to suggest that a turn is imminent but until we see weakness, there is no reason to fade this bull trend.
We are still of the camp that the rally from 1.5342 is wave B within an A-B-C correction from 1.5904. These are the reasons why. The previous bull leg was a 5th wave that broke from a 4th wave triangle and triangles lead to terminal thrusts. Wave B would equal 127% of wave A at 1.6055 and 138.2% of A at 1.6118. These are potential reversal points although a reversal could happen at any moment. We will have a special report on the EURUSD later today with monthly, weekly, daily and short term charts.
Visit our recently updated Euro Currency Room for specific resources geared towards this currency.
We maintain that wave iv in the USDJPY could be complete at 102.95. We stress the qualifier ‘may’ because 4th waves usually end up a triangles or combinations, rather than zigzags. For example, the USDJPY could be in the early stages of a triangle. Even so, price would still come lower near term, probably below 98. In summary, remain bearish.
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STRATEGY: Bearish, against 102.93, target below 95.72
Our longer term bias remains bearish but the GBPUSD may continue to bounce over the next few days. The drop from 2.0396 may be a leading diagonal as wave 1 of C (within the A-B-C decline from 2.1160). Under this interpretation, the GBPUSD rally from 1.9599 is wave 2 within the 5 wave drop (wave C) from 2.0396. The Fibo reversal zone is 1.9904-2.0092.
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STRATEGY: Bearish, against 1.9892, target 1.86
This is the daily chart showing that there is a count that treats the decline from 1.3285 as a 5 wave decline. Under this count, the next big move is towards 1.10. The rally from .9647 to 1.0249 is best counted as a double zigzag (7 waves), which either completes a correction or is the first leg in a more complex correction. Given the action (nothing impulsive) since the 1.0249 top, we favor the latter. Look for support at .9838 (100% of 1.0249-.9871/1.0216) and .9776 (78.6% of .9647-1.0249). A rally through 1.0089 warrants a bullish bias.
The latest bull leg (.9710-1.0324) is a wave 1 impulse within a 5 wave bull cycle (wave i of 1 is a diagonal). We previously treated the “drop to 1.0018 as wave 2” therefore thinking that wave 3 is underway now. But with price appearing as though it will break below 1.0018, a wave 2 low will probably come in near .9945/67 (61.8% of .9710-1.0324 and 100% extension of 1.0324-1.0018/1.0273).
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We showed the long term picture yesterday and suggested getting bearish on a break below .7781. However, the near term picture is bullish since there are 5 waves up from .7781 and 3 waves down from .8024. As such, a short term bullish bias is warranted against .7781
STRATEGY: Bullish, against .7781, target above .8024
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[1] STRATEGY is a summary of our best technical ideas. The ideas are subjective and are subject to change everyday although trades are typically held for at least a few days and sometimes a few weeks or more. Ideas are also included for crosses throughout the week; these are published at separate articles at DailyFX.
