The break in the Yen crosses confirm that the corrections from multi-year lows is complete. Regarding US dollar pairs, the AUDUSD broke its multi-month range, strongly suggesting that its 2009 high is in place. The EURUSD, GBPUSD, and NZDUSD could follow.
EURO / US DOLLAR
Wave Outlook: 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). The trend is down below 1.4203.
BRITISH POUND / US DOLLAR
|Wave Outlook: 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). 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
|Wave Outlook: The AUDUSD has finally broken its range (the EURUSD, GBPUSD, and NZDUSD could follow). The pair is contained by a false (non-Elliott) channel right now, but such channels do not hold. Staying below .8162 keeps the trend pointed lower towards former support at .7450.|
NEW ZEALAND DOLLAR / US DOLLAR
|Wave Outlook: The rally from .5484 to .6601 is equal to the .4890-.5987 rally. Equal legs are indicative of a correction. Staying below .6555 keeps the trend pointed lower towards former support at .5830.|
US DOLLAR / JAPANESE YEN
|Wave Outlook: 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 towards the former double bottom just above 87.00.|
US DOLLAR / CANADIAN DOLLAR
|Wave Outlook: The USDCAD rally from 1.0782 is unfolding as an impulse, which composes wave i of the next 5 wave rally. Once complete, a small second wave decline will unfold, warranting bullish action against 1.0782. The pattern should unfold over several weeks.|
US DOLLAR / SWISS FRANC
|Wave Outlook: The USDCHF is still stuck in its 1.06-1.10 range. We are left with competing counts until a break of the range. If the trend has turned up, then 1.0630 should remain intact.|
EURO / JAPANESE YEN
|Wave Outlook: The recent plunge is typical of 3rd wave price action. More much downside is expected, albeit not in a straight line. Consolidation may continue for the next few days before the next leg lower towards chart support above 124.00.|
BRITISH POUND / JAPANESE YEN
|Wave Outlook: The GBPJPY broke hard this week and the entire rally from 118.79 should eventually be retraced in order to complete a 3rd wave within the 5 wave decline from the 2007 top. Consolidation may continue for a few days before the next leg lower towards chart support at 143.00.|
EURO / BRITISH POUND
|Wave Outlook: The EURGBP may have completed a correction from the December 2008 top. The structure of the decline since then is not especially clear, which is the first sign that the pair in question is stuck in some sort of correction. The EURGBP should retrace most of its decline from the December high in either wave B of a triangle or flat or an impulse (5 waves).|
*Entry prices for trades that are recommended ‘at market' are listed as the close price on the date published.