Since 163.09 was exceeded, the drop from 168.94 is being treated as a triangle. A drop below 160.06 would complete wave E. This drop may or may not happen before 164.97. A drop below 160.06 and probably close to 154 would set up a buying opportunity against 149.25. Before that, bears can try and sell against 167.73 for the expected drop in wave E.
Near term, there are 5 waves down from 208.98 to 199.79 and the advance from 199.79 consists of overlapping waves, which is corrective. We mentioned last week to look for resistance in the 205.50/207.00 zone (61.8%-78.6%). The high since then was at 206.50. A push through there exposes 2.07. A bearish bias is warranted against 208.98.
The decline from 101.85 to 92.15 is only in 3 waves but is most likely wave A of a flat. In a flat, wave B often exceeds wave A in what is termed an expanding flat. As long as price is below 102.75, we will look lower. Near term, the CHFJPY faces resistance from the 61.8% of 102.75-98.27 at 101.04.
We maintain that the CADJPY is headed lower longer term (the series of lower lows and lower highs inspires confidence in the bearish assessment). There is potential resistance at 105.70 (3/5 high) but the bias is bearish as long as price is below 109.62.
As long as price is below 100.49 (red line), the longer term bearish outlook is legitimate. However, the rally from 88.14 may be an impulse as it is possible to count 5 waves up (with an extended 3rd). Even under this scenario, a drop to at least 96.20 is expected as a correction of the rally from 88.14.
The choppy decline since the October high at 91.42 may be a series of 1st and 2nd waves. Under this count, the NZDJPY needs to remain below 88.11 for a C wave decline that will eventually come under 74.25 to remain on track. An alternate count treats the entire drop from 91.42 is an ending diagonal (similar to the EURJPY). Under this alternate, a wave 2 correction is underway towards fibo resistance in the 84/85.80 area. A rally through 88.11 would make this the preferred count. In both cases, lower prices are eventually expected. The outcome would be delayed under the alternate count.
Tell us what you think about this report: contact the strategist about the article at jsaettele@dailyfx.com
TREND ANALYSIS is based on a rolling pivot model. LONG TERM TREND is determined by the last 3 months of price data (high, low, close). SHORT TERM TREND is determined by the last 4 weeks of price data (high, low, close). R3, R2, R1, PL, PH, S1, S2, and S3 are provided to aid in identifying entries and exits. These are objective measures and our subjective analysis (STRATEGY) may differ.
SCHEDULE
Monday: EURGBP, EURCHF, EURCAD, EURAUD, EURNZD
Tuesday: EURJPY, GBPJPY, CHFJPY, CADJPY, AUDJPY, NZDJPY
Wednesday: GBPCHF, GBPCAD, GBPAUD, GBPNZD
Thursday: AUDCHF, AUDCAD, AUDNZD
