• Euro Drops to Channel Support
• Japanese Yen Nearing Objective
• British Pound Beginning Bull Run?
• Swiss Franc Towards 1.1500/1.1600
• Canadian Dollar Unclear
• Australian Dollar Tests Critical Support
• New Zealand Dollar Cautiously Bullish
Commentary: Our favored count is playing out. We wrote yesterday to “remain bearish for the drop to the 1.4400’s against 1.4750.” Price has plummeted below 1.4500 and 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.
Strategy: Bearish now, move risk to 1.4655 (from 1.4750), target 1.4360
Commentary: We wrote yesterday that “we maintain a cautious bullish bias as long as price is above 109.56 in part because the decline yesterday was in only 3 waves, which is corrective. As we have focused on in recent days, the rally from there may be part of wave C within an A-B-C rally from 107.20. A would equal C just below the 61.8% of 117.93-107.20 at 113.83.” This remains the favored count as long as price is above 110.48.
Strategy: Flat
Commentary: An argument can be made that Cable is forming a fairly significant bottom. We showed the daily chart yesterday with the long term channel support and that the pair had bounced off of this level on 12/6. With now waves 1 and 2 potentially complete of a new 5 wave bull cycle, a bullish bias is warranted against 2.0180.
Strategy: Bullish, against 2.0180, target TBD
Commentary: The USDCHF has definitively broken through the 1.1350 level. Price is nearing the 61.8% of 1.1894-1.0886 at 1.1509. The next level of potential resistance is the 100% extension of 1.0886-1.1327-1.1153 at 1.1594. 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 objectives.
Strategy: Flat
Commentary: The short term pattern is not clear right now. The USDCAD has broken above a trendline drawn off of the March and August highs. The next level of potential resistance is the 200 day SMA at 1.0534. The count is unclear, but it is obvious that the pair is in an uptrend, especially after the break above the mentioned line.
Strategy: Flat
Commentary: The AUDUSD has collapsed (as have most currencies against the USD), and our favored count is no longer. The pair is testing support near the .8650 level and a break would give way to the 50% of .7673-.9400 at .8537. Once the pattern clears up, we will publish our thoughts on it here.
Strategy: Flat
Commentary: “We have favored the idea that a larger correction is unfolding to more fully correct the 5 wave advance from .6639-.7891 but the decline has yet to occur and Kiwi is testing the wave 5 high. While an expaned flat is certainly possible, we urge caution to bears that are attempting to catch the C wave decline into the .7200’s and lower. The rally from .7435, although choppy, could be a series of 1s and 2s. In this case, the NZDUSD rally could accelerate in a 3rd of a 3rd wave higher. Additionally, the pair is making a bid to close above the resistance line drawn off of the July and November highs. A daily close above there adds fuel to the bullish fire.” The pair closed above the line two days ago, which warranted adopting a bullish bias. We maintain a cautious bullish bias as long as price is above .7575.
Strategy: Flat
