• Euro Bearish Bias Below 1.4750
• Japanese Yen 113.85 Still an Objective
• British Pound Reverses Near 2.0500 Resistance
• Swiss Franc Potential Wave Terminus at 1.1390
• Canadian Dollar Extended 5th Suggests Deep Correction In the Works
• Australian Dollar Bullish Potential at Bottom of Range
• New Zealand Dollar Breaking Out?
Commentary: We have favored a rally in larger wave B to end near the 61.8% of 1.4966-1.4525 at 1.4800 but evidence exists now that a B wave top is in at 1.4750, which is just pips above the 50% retrace level. As such, we favor a drop below 1.4525 in wave C of the decline from 1.4966 while 1.4750 remains intact. A bearish target is the 38.2% of 1.3360-1.4966 at 1.4353. This count was first presented yesterday afternoon in the Elliott wave forum in post # 2188.
Strategy: Bearish now, against 1.4750, target 1.4360
Commentary: 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.
Strategy: Flat
Commentary: We wrote yesterday that “the rally from 2.0180 is testing resistance from the 61.8% of 2.0678-2.0180 at 2.0488 and the 11/23 low at 2.0518. Look for a top and reversal now.” Cable’s high yesterday was 2.0518 and the pair fell to 2.0328 before finding support and rallying back towards 2.0450. With the rally from 2.0180-2.0518 in just 3 waves, we expect a drop below 2.0180 and maybe a test of the 100% extension of 2.1160-2.0353/2.0831 at 2.0024 before the pair finds real support.
Strategy: Bearish, move risk to 2.0518 (from 2.0678), target below 2.0030
Commentary: We wrote yesterday that “with price pushing through 1.1353, it is clear that wave v of 3 is not yet underway. The next level of potential resistance is the 50% of 1.1896-1.0886 at 1.1391.” Look for a top and reversal near that level, which is just in front of the psychologically important 1.1400 as well.
Strategy: Flat
Commentary: This is one count that we are working with in the USDCAD. It labels the rally from .9055 as an impulse with an extended 5th wave in the form of a diagonal (overlapping). Under this count, larger wave 2 is likely to be a deep retracement, potentially bringing price all the way back to the 61.8% of .9055-1.0216 at .9499. This is also the origin of the diagonal and price often retraces the entire diagonal when that diagonal is in the 5th wave position.
Strategy: Bearish, against 1.0216, target 1 at .9790
Commentary: We are posting a short term 15 minute chart this morning to show the bullish potential. The rally from .8659 to .8895 can be counted as a 5 and yesterday’s decline is a 3 (much like the USDJPY decline). A push above .8845 near term would make the rally from .8710 a 5 wave affair and give way to a corrective setback, which would present an opportunity to get bullish (see the arrows that outline the expected path on the chart). We eventually expect a rally through .9068 at the minimum.
Strategy: Bullish, against .8653, target .9140
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.
Strategy: Flat
