Euro Gets Kicked While Down
Japanese Yen No Relief In Sight
British Pound Potentially One More High
Swiss Franc Extending Losses
Canadian Dollar Headed Towards 1.1800
Australian Dollar Challenges .7900
New Zealand Dollar Nearing 61.8% Retracement
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). The rally from 1.2865 is choppy and looks corrective. Fibo resistance begins at the 38.2% of 1.3296-1.2865 at 1.3028. Former support at the 12/18 low of 1.3051 is additional resistance.
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 continues to make higher highs. Near term, a measured objective lies at 123.21, which is where the 114.42-119.67 rally would equal the rally from 117.97. Former resistance at 120.87 is now near term support.
GBPUSD We focused last week on how much more constructive Cable was compared to the EURUSD. The pair has turned up in a 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. The rally from 1.9260 has stalled at former support centered on 1.9750. The recent weakness / consolidation looks like a 4th wave within the larger 5th wave. This 4th may be tracing out a triangle, thus support stems from the 1/19 low at 1.9694. A push through 1.9777 targets the high at 1.9846.
USDCHF The USDCHF has traded sideways since 1/12 (making a new short term high at 1.2546 on 1/18). A rally through 1.2546 would make the rally from 1.1878 5 waves and solidify the bullish outlook. The confluence of the 78.6% fibo of 1.2767-1.1878 / 11/6 high at 1.2578 is potential short term resistance on a break above 1.2546. The 1/16 low at 1.2416 is support.
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 short term inverse head and shoulders continuation pattern also favors a rally to above 1.1800 before a larger turn lower. A drop below 1.1644 would grant confidence the bearish case.
AUDUSD The AUDUSD is coming up on resistance from the 12/8 high at .7929. The extent of the rally from .7759 strongly suggests that the next 5 wave advance is already in the works. As such, the 3 year resisting line is expected to give way. That line is just below the 1/3 high (.7979). .7858 is initial support.
NZDUSD Kiwi has held above the 7 month trendline and broke above .6970 this morning (last weeks high). The rally from .6840 may be a series of 1 and 2 waves rather than a correction of weakness. Watch price action near the 61.8% of .7096-.6840, which is at .6998. A rally through the .7000 figure gives scope to the 78.6% at .7041. Stalling or a rejection at .7000 could give way to another leg down.
