Last week, I wrote that the rally consists of a clean 5 waves, so weakness is expected. The decline should prove corrective but should take a number of weeks, so expect choppy price action. The GBPCHF has declined in what is probably wave a of an a-b-c decline and found support at the 38.2% of 1.5113-1.6956 (1.6227). The subsequent advance is probably wave b. There is potential resistance at 1.6565. The next opportunity in the GBPCHF likely comes from the long side in the 1.58-1.60 zone.


The GBPCAD rally from 1.7164 to 1.8380 was in 5 waves. I wrote last week that the rally is in 5 waves, strongly suggesting that a major bottom is in place and that the pair will continue much higher; but not before a corrective decline takes place. The corrective decline ended yesterday at 1.7670 and the pair has vaulted higher in what is probably the beginning of a 3rd wave. Staying above 1.7670 keeps the long term uptrend intact, although price ideally remains above 1.8116 near term. 1.8630 (12/19/08 high) is the next level of potential resistance.


Bulls are firmly in control as the GBPAUD has broken above trendline resistance as well as the 200 day SMA. Resistance is not until the 12/15/08 high at 2.3039 and price ideally remains above 2.1437 on its way to that level.


A multi-year triangle is likely unfolding. I wrote last week that wave d of the triangle is likely complete therefore wave e is expected to begin and make its way towards 2.80. The GBPNZD has already made it to 2.76! Wave e may come close to testing 3.00. Short term, a correction of the impressive advance may lead to a test of support at 2.6750.