A few more days of choppy price action are expected in order to correct the strong Yen advance that occurred Wednesday. However, Yen or US dollar weakness are viewed as corrective going forward and should be bought.

Euro / US Dollar

Until a break below 1.3747, there are numerous competing counts, including a triangle count as wave 4 within a diagonal from 1.2454. Bigger picture, I do expect weakness in the EURUSD but I'm not sure whether or not that decline occurs from here or after one more rally (above 1.4720). Yesterday, I wrote that the bearish count shown above is valid against 1.4057. I suggested 1.4075 as the risk level, not expecting a complex expanded flat. The lesson is to always heed Murphy's Law. 1.4203 is the bearish level in the sand. Notice as well the topping head and shoulders formation since roughly June 23.

British Pound / US Dollar

I've written recently that the rally from 1.5800 counts best as a 3 wave rally and 3 wave rallies occur in B or X wave positions, diagonals, and triangles. All of these are possible right now. The decline from 1.6750 can be counted as a 5 (impulse), which favors the expanded flat count in which the GBPUSD will eventually drop below 1.5800. In this case, the leg lower from 1.6750 would be wave i or a (complex). There is the risk of a rally back to at least 1.6300 in order to correct the decline from 1.6750 (RSI divergence favors this interpretation). It is possible that the rally from 1.5980 is complete as price reversed in the center of the Fibonacci zone. What is worrisome about that interpretation is the structure of the rally from 1.5980, which looks like a 5. As such, the advance may be just wave A of an A-B-C zigzag correction. Fibonacci resistance extends to 1.6450 and the larger bearish bias is valid against 1.6750.

Australian Dollar / US Dollar

The AUDUSD has finally broken its range (this is a sign that the EURUSD and GBPUSD are to follow). The pair is contained by a false (non-Elliott) channel right now, but such channels do not hold. There is potential resistance from Fibonacci at .7920. The trend is considered down against .8044.

New Zealand Dollar / US Dollar

The short term NZDUSD pattern is a beautiful depiction of a free market's fractal nature. The decline from .6550 to .6240 was in 5 waves and the subsequent rally to .6400 was in 3 waves. Similarly, the decline from .6400 and rally to .6345 was of the same form but at one less degree of trend. The downside is favored against .6400 in anticipation of a break below .6150.

US Dollar / Japanese Yen

For the last number of weeks, I've written that one can not force analysis upon choppy, unclear market structure. Sometimes (this is that time), the correct decision is to do nothing and await clarity. The drop below 93.50 eliminates the bullish triangle count and leaves us with the bearish count in which the decline from 101.50 is a series of 1st and 2nd waves. Former support in the 93.50-94.00 zone is now resistance. Bears are favored against 97.00.

US Dollar / Canadian Dollar

The extent of the rally from 1.0782 almost assures that the entire decline from 1.3068 is complete. Additionally, the rally from 1.0782 has unfolded as an impulse. I am not sure if the rally from 1.0782 is complete. A thrust higher from a running triangle is possible before a corrective decline. It is best to wait for clarity here before taking a strong stand.

US Dollar / Swiss Franc

The USDCHF is still stuck in its 1.06-1.10 range. We are left with competing counts, shown with labels above, until a break of the range. If the trend has turned up, then 1.0630 should remain intact.

British Pound / Japanese Yen

The larger GBPJPY trend has turned back down. Near term, a 4th wave correction is probably unfolding. 4th waves are notoriously choppy and difficult. Expect at least a few days of corrective action in either a triangle or flat.

Jamie Saettele publishes Daily Technicals every weekday morning (930 am EST), COT analysis (published Monday mornings), technical analysis of currency crosses throughout the week (EUR on Tuesday, JPY on Wednesday, GBP on Thursday, AUD on Friday), and the DFX Trend Index every day after the NY close. He is also the author of Sentiment in the Forex Market. Follow his intraday market commentary at DailyFX Forex Stream.

Please send comments about this report to jsaettele@dailyfx.com