• Euro Wave 4 Nearing an End
• Japanese Yen Towards 61.8% Fibonacci Level
• British Pound Testing 200 day SMA
• Swiss Franc Objective at 1.1594
• Canadian Dollar Deep Correction Expected
• Australian Dollar Working Lower in Wave C
• New Zealand Dollar Working Lower in Wave C
Commentary: The EURUSD continues to work lower in wave iv within the 5 wave rally from 1.3261. We wrote last week that “the next level of potential support is the confluence of the 38.2% of 1.3360-1.4966 at 1.4353 and where C = A at 1.4306.” The low today is at 1.4330. Near term, a bounce to 1.4452 and maybe even 1.4500 is likely before a new low completes wave iv. In summary, the EURUSD is forming an important low.
Strategy: Flat (bearish target hit at 1.4360)
Commentary: We maintain that wave C within an A-B-C rally from 107.20 remains underway. Wave A would equal wave C just below the 61.8% of 117.93-107.20 at 113.83. A resisting trendline is at 114.63 today and decreases about 6 pips per day. We do expect a top and reversal near these levels before wave iii of 3 within the 5 wave bearish cycle that began at 124.13 begins. This probably does not happen until after the first of the year.
Strategy: Flat
Commentary: Similar to the EURUSD, Cable is forming a significant low. Price is testing the confluence of the 200 day SMA, channel support currently. We will keep a close eye on the short term structure, looking for a low to trade against as the year comes to an end.
Strategy: Flat
Commentary: The USDCHF is nearing the 100% extension of 1.0886-1.1327/1.1153 at 1.1594 and the 61.8% of 1.2215-1.0886 at 1.1707. Given the outlook for bottoms to form in the EURUSD and GBPUSD over the next week or so, we expect a top in the USDCHF near the mentioned levels.
Strategy: Flat
Commentary: The short term pattern is not clear right now. The entire rally from .9055 could be the first leg in a new bull; either a 5 leg bull rally or a 3 leg bull rally. The rally from .9055 counts better as a 3 itself, so a large flat might be unfolding from .9055. If this is the case, then the USDCAD is likely to undergo a deep correction, to at least the 61.8% of .9055-1.0248 at .9511.
Strategy: Flat
Commentary: The AUDUSD continues to slide and is likely to continue lower until at least a support shelf which begins with the 200 day SMA at .8517. The next potential support levels are the 61.8% of .7670-.9400 at .8331. We will look for a bottom and reversal near there.
Strategy: Flat
Commentary: We favor the idea that an expanded flat is unfolding (wave b exceeds top of wave v). Wave c of the flat is underway and price must come under .7435 before we can begin to look for a bottom. As such, a bearish bias is warranted until price does decline below this level.
Strategy: Flat
