The Euro crosses (except for the EURCHF) will likely weaken in the weeks ahead.
5 waves up from the January 2007 low at .6535 suggests that a large corrective decline is underway from .8187. The Fibonacci zone does not begin until .7556. The spike to .8033 yesterday may be the end of a small second wave. Ideally, price remains below there on its way for a break of .7750.
We maintain that 5 waves up from 1.5326 indicate that the longer term trend has turned up. The decline from 1.6376 has now tested the 61.8% of 1.5326-1.6376. If the larger bullish bias is correct, then price should turn up from near here.
The big picture shows a range playing out as possibly a triangle since 2000. Under this scenario, the pair should be headed lower in wave D of the triangle towards 1.40 over the next number of months. Near term, price ideally remains below 1.5481.
It is possible to count 5 waves up from 1.6047 and a corrective decline is underway now. In fact, waves A and B of an flat correction may be complete. Expect wave C to bring price below 1.723 and possibly test the 61.8% of 1.6043-1.8277 at 1.6862.
The EURNZD is vulnerable weakness over the next few months to complete wave E of a triangle that began in 1992. The decline could be significant and retrace as much as half (or more) of the advance from 1.6326.
Jamie Saettele writes Forex Technicals: The Day Ahead, Monday-Thursday (published at 6 pm EST), Daily Technicals every weekday morning (9 am EST), COT Analysis (published Monday mornings), and analysis of currency crosses throughout the week. He is also the author of Sentiment in the Forex Market.
Contact at jsaettele@dailyfx.com
