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While the specific count eludes us, it is worth noting that the rally from the 2005 low at 1.1640 is now in 15 waves (derivative of a correction).
The latest breakout is from a triangle, which is a terminal pattern.
Expectations are for a top and reversal in the next few weeks that gives way to a corrective decline that could last over a month or more.
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The entire rally from 1.4438 could be complete at 1.5460 .
Wave 5 exceeded where it would equal wave 1 at 1.5391.
It is possible that wave 5 extends closer to where wave 5 would equal 61.8% of waves 1 through 3 at 1.5635.
5 waves down from 1.5460 would signal that a top is in place.
Potential support is the 1.5250/1.5300 zone.
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Longer term, we maintain that a 12 year triangle ended at 124.13 in June 2007 and that the USDJPY is headed lower for a test of its 1995 low at 81.12.
.
There is plenty of room for the USDJPY to fall over the next few weeks and months.
There are Fibonacci extensions (161.8) at 97.64 and 98.06.
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A5 wave drop from 108.35 may be complete at 101.40.
This does not change the long term bearish call for the pair to test the 1995 low near 80, but it does suggest that at least a correction is due; possibly all the way back to 104.
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The GBPUSD declined in 5 waves from 2.1160, indicating that a significant top is in place.
The 5 wave decline is viewed as either wave 1 in a 5 wave bear cycle or wave A in a 3 wave bear cycle.
In other words, longer term bearish potential is great.
The rally from 1.9337 is either wave 2 or B and is nearing a top.
The Fibonacci reversal zone is 2.0033-2.0463; which Cable is in the middle of now.
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The rally from 1.9361 is wave C within the A-B-C advance from 1.9337.
Wave C should divide into 5 waves and so far there are only 3 waves up.
As such, we expect additional gains.
The next likely resistance point is the 61.8% at 2.0663.
Look for support in the 2.0028/2.0100 zone.
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The drop from 1.1103 (wave 3 within the 5 wave drop from 1.1591) is complete as there are 5 waves down.
Look for a correction to reach 1.0458 over the next few weeks.
This rally should prove corrective.
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The pattern in the USDCAD since the November low at .9055 is either an A-B-C rally that will lead to a new low (under .9055) or a 1-2 (expanded flat) base that will lead to a strong rally to new highs (suggesting that a multi-year USDCAD low is in place).
The chart today shows the latter count.
In the case of the latter, the drop from 1.0378 has satisfied minimum expectations by coming under .9755.
We will be able to indentify a low from the wave structure on the hourly (once we see 5 waves up).
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The drop from .9976 could be the beginning of wave 3 lower within the 5 wave bearish cycle from 1.0197.
The alternate count treats the up-down sequence from .9710 as waves a and b.
Therefore, keep risk above 1.0197.
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency.
STRATEGY:
Bearish, against 1.0197, target TBD
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The weekly chart zooms in on the A-B-C advance from the 2001 low and in particular wave C from .6771 (July 2004 low).
As is evident on the chart, the rally through the November 2007 high at .9400 satisfies minimum expectations for wave 5 of C.
However, we still expect a test of 1.00 before the major reversal takes place.
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The 60 minute chart zooms in on the rally from .8512 (January low).
The rally from .8512 is viewed as wave 5 of large C.
So far, there are only 3 waves complete to .9496.
The drop to channel support is wave 4 and may be complete at .9218.
If .9218 fails to hold, then look the wave 4 low to form close to .9111; the former 4th wave.
If price drops below .8874, then the probability increases significantly that a multi-year top is in place at .9496.
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Since the top in July at .8108, we contend that the NZDUSD is tracing out a large expanded flat.
Wave B of the flat could test .8504 (127% of A) or .7634/69 (100% extension of a within B and 138.2% of A).
As of now, risk is at .7921.
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It is possible that the decline from .8214 to .7921 is in 5 waves and that a larger expanded flat is unfolding now.
Kiwi has held above .7900, which is supported by a line drawn off of the 2/5 and 2/13 lows.
As long as price is above .7781, upside potential remains.
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Wave 5 within the 5 wave rally from 1.4438 is nearing completion.
Wave 5 has far exceeded where it would equal wave 1 at 1.5391.
The next objective would be where wave 5 would equal 61.8% of waves 1 through 3, which is at 1.5635.
1.5370 should provide support near term and price is above 1.5290, expect additional gains.
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Remember that the larger wave count treats the current USDJPY decline as a 3rd of a 3rd of 3rd (see the Yen Bearish count from 2/29).
Objectives are not until the 97/98 area.
However, we’d like to present a count that suggest a 5 wave drop from 108.35 is complete (or close to complete).
This does not change the long term bearish call for the pair to test the 1995 low near 80, but it does suggest that at least a correction is due; possibly all the way back to 104.
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While out short term timing skills have been off with Cable, the longer term call for a break through 2.00 is working.
Near term, the GBPUSD probably continues to work higher towards the 50% of 2.1160-1.9337 at 2.0248.
The next likely resistance point is the 61.8% at 2.0663.
The rally from 1.9719 is viewed as wave 3 of C.
These are usually vertical rallies such as we see now.
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We wrote yesterday that “the form of the decline tells us that there is additional downside potential.
As long as price is below 1.0427, expect the USDCHF to test 1.0230 (1.618 extension).”
The USDCHF dropped through 1.02 to hit 1.0134 this morning.
Now however, it does look like a correction is due.
There are 5 waves down from 1.0427, and possibly 1.1105.
In the case of the latter, expectations are for an upward correction to reach 1.0458.
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We wrote yesterday that “the decline from .9976 to .9818 is best counted as an impulse (5 waves) and the preceding rally can be counted as a double zigzag (a-b-c-x-a-b-c), which is corrective.
As such, a bearish bias is warranted against .9976.”
The USDCAD has fallen and the drop from .9976 could be the beginning of wave 3 lower within the 5 wave bearish cycle from 1.0197.
The alternate count treats the up-down sequence from .9710 as waves a and b.
Therfore, keep risk at 1.0197.
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STRATEGY:
Bearish, against 1.0197, target TBD
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We view the decline from .9496 as wave 4 within the 5 wave advance from .8512.
Price is expected to exceed .9496 in the next few weeks and possibly test parity before a major reversal occurs.
Within the 5 wave rally from .8512, wave 1 is 588 pips, and wave 3 is 622 pips.
Wave 5 could be extended or could be close to the lengths of wave 1 and 3.
This places the end of the AUDUSD rally near at least .9800-.9900.
Near term, the up-down sequence from .9218 could be wave i and ii of a 5 wave bull cycle (larger wave 5).
Maintain a bullish bias against .9218.
STRATEGY: Bullish, against .9218, target TBD
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The short term count in the NZDUSD is eluding us but given the call for a AUDUSD strength (after a brief period of consolidation/weakness), look for Kiwi strength.
We are showing the daily today since the short term chart is not so clear.
Since the top in July at .8108, we contend that the NZDUSD is tracing out a large expanded flat.
Wave B of the flat could test .8504 (127% of A) or .7634/69 (100% extension of a within B and 138.2% of A).
As of now, risk is at .7921.
STRATEGY: Bullish, against .7921. target .8499
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We maintain that wave 5 within the 5 wave rally from 1.4438 is nearing completion.
Wave 5 would equal wave 1 at 1.5391, not far today’s high so far.
This is our favored count as long as price is above 1.5146.
If we see a 5 wave drop on a short term (15 min) chart, then we’ll discuss it at DailyFX +.
For now, there is no sign of a reversal and no reason to fade the trend.
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The drop to 102.64 probably completed 5 waves down from 108.22.
When wave 5 fails to register a new price extreme for the move (as happened here because the wave 3 low was 102.62), the 5th wave is termed ‘truncated’.
Expectations are for this corrective rally from 102.64 to reach the 38.2% of 108.22-102.64 at 104.77 (former congestion as well) before the next bear leg begins.
Wave C of the a-b-c rally should begin soon.
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We are counting the rally from 1.9361 to 1.9946 as 5 waves (truncated) and larger wave 1 of C from 1.9361. Wave 2 completed at 1.9719.
Very short term, 5 waves up from 1.9719 might be complete as wave i of 3 of C.
If this is the case, then wave ii should bring price back to the 50%-61.8% zone of wave i; which is 1.9849/89.
Look for longs in this area.
The target will not be until at least 2.03 (emphasis on ‘at least’).
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STRATEGY: Look for longs in 1.9849/89 zone, against 1.9719, target is probably near 2.04/05.
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The correction that we were looking for in the USDCHF (to test at least 1.05) appears to have ended at 1.0458.
The pair has already registered a new low (below 1.0307) but the form of the decline tells us that there is additional downside potential.
As long as price is below 1.0427, expect the USDCHF to test 1.0230 (1.618 extension).
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Recent commentary focused favored “a bullish bias against .9710.”
As the pattern changes, so too does our bias.
The decline from .9976 to .9818 is best counted as an impulse (5 waves) and the preceding rally can be counted as a double zigzag (a-b-c-x-a-b-c), which is corrective.
As such, a bearish bias is warranted against .9976.
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency.
STRATEGY:
Bearish, against .9976, target TBD
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/03/dailyfx_reports/techs/03-06-08techs7.gif
We view the decline from .9496 as wave 4 within the 5 wave advance from .8512.
Price is expected to exceed .9496 in the next few weeks and possibly test parity before a major reversal occurs.
Within the 5 wave rally from .8512, wave 1 is 588 pips, and wave 3 is 622 pips.
Wave 5 could be extended or could be close to the lengths of wave 1 and 3.
This places the end of the AUDUSD rally near at least .9800-.9900.
Near term, there are 5 wave up from .9218, so look to get long near structural support near .9300.
Risk is .9218.
STRATEGY: Look for longs near .9300, against .9218, target TBD
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The short term count in the NZDUSD is eluding us but given the call for a AUDUSD strength (after a brief period of consolidation/weakness), look for Kiwi strength.
We are showing the daily today since the short term chart is not so clear.
Since the top in July at .8108, we contend that the NZDUSD is tracing out a large expanded flat.
Wave B of the flat could test .8504 (127% of A) or .7634/69 (100% extension of a within B and 138.2% of A).
As of now, risk is at .7921.
STRATEGY: Bullish, against .7921. target .8499
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There is no change to the EURUSD outlook from yesterday.
“Wave 5 within the 5 wave rally from 1.4438 may be underway now.
Wave 5 would equal wave 1 at 1.5391, not far from the mentioned objectives of 1.5429 and 1.5447.
This is our favored count as long as price is above 1.5158.
A drop below there means that wave 4 is still underway and is likely to test 1.5072 before wave 5 up begins.”
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The drop to 102.64 probably completed 5 waves down from 108.22.
When wave 5 fails to register a new price extreme for the move (as happened here because the wave 3 low was 102.62), the 5th wave is termed ‘truncated’.
Expectations are for this corrective rally from 102.64 to reach the 38.2% of 108.22-102.64 at 104.77 (former congestion as well) before the next bear leg begins.
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We were stopped out on the drop below 1.9811 (price nearly touched 1.97 this morning) but we remain bulls.
The alternate count moves up to preferred status.
We are counting the rally from 1.9361 to 1.9946 as 5 waves (truncated) and larger wave 1 of C from 1.9361.
The current decline is wave 2 of C and it appears that a drop below 1.9719 is required in order to complete the corrective decline.
The 1.9615-1.9707 zone is former congestion and a potential support zone.
The 50% of 1.9361-1.9946 is in the middle of this zone, at 1.9653.
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STRATEGY: Look for longs in 1.9615-1.9707 zone, against 1.9361, target is probably near 2.04/05.
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Similar to the USDJPY, we favor the idea that the USDCHF completed 5 waves down from 1.1033 but with a truncated 5th.
As such, a larger correction is underway now as a 4th wave that should end in the 1.05/1.06 zone (23.6%-38.2% of 1.1033-1.0336).
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The rally from .9710 could be counted as an impulse.
As such, a bullish bias is warranted against .9710.
Potential support begins at .9826.
The next leg of the rally will be either wave 3 or C within the cycle from .9055.
The rally will probably be strong. The goal for this week is to position for a big move higher.
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We view the decline from .9496 as wave 4 within the 5 wave advance from .8512.
Price is expected to exceed .9496 in the next few weeks and possibly test parity before a major reversal occurs.
Within the 5 wave rally from .8512, wave 1 is 588 pips, and wave 3 is 622 pips.
Wave 5 could be extended or could be close to the lengths of wave 1 and 3.
This places the end of the AUDUSD rally near at least .9800-.9900.
Near term, look for support and an end to the wave 4 correction in the .9111/.9185 zone (50%-61.8% of wave 3).
STRATEGY: Look for longs in .9111/.9185 zone, against .8874, target TBD
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The short term count in the NZDUSD is eluding us.
There is potential support near .7900 from a line drawn off of reaction lows from 2/5 and 2/13.
A drop to here could complete an a-b-c decline from .8213 and give way to a big rally.
This would fit with the AUDUSD outlook.
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STRATEGY is a quick summary of our best technical ideas.
The ideas are subjective and are subject to change everyday although trades are typically held for at least a few days and sometimes a few weeks or more.
Ideas are also included for crosses throughout the week; these are published at separate articles at DailyFX
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Wave 5 within the 5 wave rally from 1.4438 may be underway now.
Wave 5 would equal wave 1 at 1.5391, not far from the mentioned objectives of 1.5429 and 1.5447.
This is our favored count as long as price is above 1.5158.
A drop below there means that wave 4 is still underway and is likely to test 1.5072 before wave 5 up begins.
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A drop below 102.62 would complete 5 waves down from 108.22.
If this happens, then it is possible that we could get an opportunity to sell into a corrective rally that challenges former congestion in the 103.80/104.40 zone.
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Cable still has a few hundred pips of upside potential.
A triangle has formed since the 1.9970 high and is viewed as wave 4 within the 5 wave advance from 1.9361 (which itself is a C wave).
As such, a terminal thrust above 1.9970 probably occurs this week.
Resistance begins at 2.0033.
Risk on longs can be moved to 1.9811.
Within wave C (from 1.9361); wave i is 346 pips and wave iii is 355 pips.
With waves i and iii roughly equal, it is likely that wave v will be extended.
The former 4th wave at 2.0101 is a possible target but with wave v expected to be extended, the GBPUSD could charge the 50% or 61.8% at 2.0248 or 2.0463.
Visit our recently updated British Pound Currency Room for specific resources geared towards this currency.
STRATEGY: Bullish, against 1.9811, target 2.0119
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A drop below 1.0307 would complete 5 waves down from 1.1033.
This completes wave 3 within the 5 wave bear cycle from 1.1105.
A shallow 4th wave correction is then expected.
Resistance should be strong near 1.0420.
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The rally from .9710 could be counted as an impulse.
As such, a bullish bias is warranted against .9710.
Potential support begins at .9826.
The next leg of the rally will be either wave 3 or C within the cycle from .9055.
The rally will probably be strong. The goal for this week is to position for a big move higher.
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency.
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We view the decline from .9496 as wave 4 within the 5 wave advance from .8512.
Price is expected to exceed .9496 in the next few weeks and possibly test parity before a major reversal occurs.
Within the 5 wave rally from .8512, wave 1 is 588 pips, and wave 3 is 622 pips.
Wave 5 could be extended or could be close to the lengths of wave 1 and 3.
This places the end of the AUDUSD rally near at least .9800-.9900.
STRATEGY: Bullish, against .9263, target near .9800
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The drop from .8214 is in just 3 waves and is therefore corrective.
The rally from .7922 to .8081 is an impulse, which makes us confident in the bullish count.
Similar to the AUDUSD, the NZDUSD is expected to make one more high in a 5th wave (above) .8214) before a major reversal occurs.
STRATEGY: Bullish, against .7922, target TBD
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While the specific count eludes us, it is worth noting that the rally from the 2005 low at 1.1640 is now in 15 waves (derivative of a correction).
The latest breakout is from a triangle, which is a terminal pattern.
Expectations are for a top and reversal in the next few weeks that gives way to a corrective decline that could last over a month or more.
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We wrote Friday that “even if wave 4 is still forming, higher prices are a high probability next week as wave 5 is required to complete the entire bull cycle from 1.4438.
Objectives lie above 1.5400; there are 261.8% extensions at 1.5429 and 1.5447.
We will look for a top and reversal near there.”
Our count favors the idea that wave 5 within the 5 wave rally from 1.4438 is underway now.
Wave 5 would equal wave 1 at 1.5391, not far from the mentioned objectives of 1.5429 and 1.5447.
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Longer term, we maintain that a 12 year triangle ended at 124.13 in June 2007 and that the USDJPY is headed lower for a test of its 1995 low at 81.12.
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There is plenty of room for the USDJPY to fall over the next few weeks and months.
In fact, the pair is entering the most bearish part of its pattern since 124.13.
As such, we are on the lookout for shorts.
There are Fibonacci extensions (161.8) at 97.64 and 98.06.
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Near term, the USDJPY is plunging.
A drop below 102.62 could complete 5 waves down from 108.22.
If this happens, then it is possible that we could get an opportunity to sell into a corrective rally that challenges former congestion in the 103.80/104.40 zone.
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The GBPUSD declined in 5 waves from 2.1160, indicating that a significant top is in place.
The 5 wave decline is viewed as either wave 1 in a 5 wave bear cycle or wave A in a 3 wave bear cycle.
In other words, longer term bearish potential is great.
The rally underway now is either wave 2 or B and is nearing a top.
We will look to identify a top in the 2.0033-2.0463 zone.
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Cable still has a few hundred pips of upside potential.
A triangle has formed since the 1.9970 high and is viewed as wave 4 within the 5 wave advance from 1.9361 (which itself is a C wave).
As such, a terminal thrust above 1.9970 probably occurs this week.
Resistance begins at 2.0033.
Risk on longs can be moved to 1.9807
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STRATEGY: Bullish, against 1.9807, target 2.0119
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The drop from 1.1591 is viewed as wave 5 within the 5 wave drop from 1.2569.
Within this 5th wave, the USDCHF is currently in wave iii of 5, which should come under at least 1.0239 (where wave iii of 5 would equal wave i of 5).
The 161.8% extension would be the next potential support at .9704.
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A drop below 1.0307 would complete 5 waves down from 1.1033.
This completes wave 3 within the 5 wave bear cycle from 1.1105.
A shallow 4th wave correction is then expected.
Resistance should be strong near 1.0420.
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The pattern in the USDCAD since the November low at .9055 is either an A-B-C rally that will lead to a new low (under .9055) or a 1-2 (expanded flat) base that will lead to a strong rally to new highs (suggesting that a multi-year USDCAD low is in place).
In the case of the latter, the drop from 1.0378 has satisfied minimum expectations by coming under .9755.
We will be able to indentify a low from the wave structure on the hourly (once we see 5 waves up).
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The rally from .9710 could be counted as an impulse.
As such, a bullish bias is warranted against .9710.
Potential support begins at .9826.
The next leg of the rally will be either wave 3 or C within the cycle from .9055.
The rally will probably be strong. The goal for this week is to position for a big move higher.
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency.
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The AUDUSD is in its final stages of an A-B-C rally that began in 2001.
We will look to identify the top on the short term charts.
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It is tempting to attempt a bearish play against .9496 since the decline from there is in 5 waves.
However, that decline could be wave C of an expanded flat from .9457 that completed wave 4 within the 5 wave advance from .8512.
Under this count, price will exceed .9496, if only slightly, before forming THE top.
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In the daily, it is likely that the NZDUSD has formed a double top in the form of an expanded flat with the July 2007 high at.8108.
Expectations are for the NZDUSD to begin accelerating lower in the next few weeks.
The objective is below .6639.
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The drop from .8214 has yet to complete 5 waves.
Until that occurs, we will refrain from taking a bearish stance.
If price does drop below .7922 in the next few days, then we’ll look to sell the 3 wave bounce that follows.
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STRATEGY is a quick summary of our best technical ideas.
The ideas are subjective and are subject to change everyday although trades are typically held for at least a few days and sometimes a few weeks or more.
Ideas are also included for crosses throughtout the week; these are published at separate articles at DailyFX.
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Wave 3 within the 5 wave rally from 1.4438 is probably complete at 1.5229.
Wave 4 is either complete at 1.5160 or is still underway.
A larger wave 4 correction could reach the former 4th wave (iv) at 1.5074.
Even if wave 4 is still forming, higher prices are a high probability next week as wave 5 is required to complete the entire bull cycle from 1.4438.
Objectives lie above 1.5400; there are 261.8% extensions at 1.5429 and 1.5447.
We will look for a top and reversal near there.
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We have focused on the idea recently that “the entire rally from 104.97 to 108.59 could have completed a larger correction” but have also mentioned that “we have subjectively favored a larger rally because of various sentiment measures.”
The drop below 105 proves us wrong and we will look to align with bears.
What were suspicions are now confirmed.
That is, wave iii of 3 of larger 3 (within the decline from 124.13) is underway.
There are Fibonacci extensions (161.8) at 97.64 and 98.06.
The drop below 104.97 probably signals the beginning of the drop that will challenge the 1995 low near 81.
There is plenty of room for the USDJPY to fall over the next few weeks and months.
In fact, the pair is entering the most bearish part of its pattern since 124.13.
As such, we are on the lookout for shorts.
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“We view the rally to 1.9970 as completing wave iii of larger C (within the A-B-C from 1.9337) and the decline to 1.9761 as wave iv of C.
Therefore, wave v is working higher now to complete wave C and therefore larger 2 or B within a bear cycle from 2.1160.
The 200 day SMA at 2.0124 may provide resistance.”
Cable’s rally is not complete.
Near term, maintain a bullish stance as long as price is above 1.9761.
As mentioned, the 200 day SMA could provide resistance but so could Fibonacci levels at 2.0248 and 2.0463.
The goal in March will be to identify the top of larger wave 2 (or B) from 1.9337 in order to position for the big decline that waits.
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STRATEGY: Bullish, against 1.9761, target 2.0119
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The objective that we identified yesterday; the 261.8% extension of 1.1033-1.0832/1.0927 at 1.0410 is just below current price.
We are looking for this level to provide support and possibly mark the end of wave 3 within the 5 wave bear cycle from 1.1105.
A wave 4 correction is then expected, which could reach the 1.0530 area (former 4th wave) before a drop in wave 5 registers at least a multi-month low.
This process should take at least a few weeks.
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We contend that the drop from 1.0197 is the final leg in a large expanded flat that began at 1.0248.
The drop below .9755 satisfied minimum expectations but form indicates that a new low (below .9710) is required before we can begin to look for a bottom.
Possible terminal points from various Fibonacci measurements are anywhere from .9378 to .9691.
We will watch form carefully in order to determine the best possible exit.
Risk on shorts can be moved to .9845.
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency.
STRATEGY: Bearish, against .9845, target below .9755
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We wrote yesterday to “look for a top and reversal near .9500.”
The high yesterday was at .9496 and the AUDUSD has dropped over 100 pips since.
However, the high at .9496 was probably just wave 3 within the 5 wave bull cycle from .8512.
The drop from .9496 is either wave 4 or part of wave 4.
.9325 may remain intact since 4th waves are often triangles.
A new high in wave 5 probably completes the entire rally from the 2001 low.
We will be looking to sell what could prove to be a multi-year high in the next few weeks (probably between .9600 and 1.00).
This probably takes a few weeks to resolve itself.
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We also expect a new high in the NZDUSD.
The decline from .8214 is corrective to this point and could be a small 4th wave within a 5 wave rally from .7814.
Potential support is at .8092 (38.2%) and .8066 (2/26 reaction low).
The bias remains bullish as long as price is above .7902.
A 5th wave rally should begin soon and could test .8364 (100% extension).
If the drop from .8214 turns into an impulse, then we will look for short opportunities.
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There is not much of a change to yesterday’s commentary.
We view the surge to the mid 1.51s as wave iii of 3 within the 5 wave rally from 1.4438.
The choppy decline from 1.5144 is wave iv of 3 and should last for the rest of the week.
A retest of 1.5144 is certainly possible (in the case of an expanded flat).
Support should be strong in the 1.5000/58 zone.
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The entire rally from 104.97 to 108.59 could have completed a larger correction but we have subjectively favored a larger rally because of various sentiment measures.
A large complex correction may be unfolding with the drop from 108.59 as wave X in a W-X-Y.
If this is the case, then price should put in a bottom soon and begin a rally that reaches roughly 110.
If the 3 wave rally from 104.96-108.59 did complete the correction, then resistance should be strong in the 107.30/50 zone.
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STRATEGY: Bullish, against 105.95, target 107.19
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We view the rally to 1.9970 as completing wave iii of larger C (within the A-B-C from 1.9337) and the decline to 1.9761 as wave iv of C.
Therefore, wave v is working higher now to complete wave C and therefore larger 2 or B within a bear cycle from 2.1160.
The 200 day SMA at 2.0124 may provide resistance.
Visit our recently updated British Pound Currency Room for specific resources geared towards this currency.
STRATEGY: Bullish, against 1.9761, target 2.0119
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The USDCHF continues to decline and each tick lower sets a new all-time low. The pair is currently at potential measured support from the 161.8% extension of 1.1033-1.0835/1.0927.
1.05 could provide round number resistance but the next level of measured support is the 261.8% extension of 1.1033-1.0832/1.0927 at 1.0410.
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There is still plenty of downside potential near term for the USDCAD.
We contend that the drop from 1.0197 is the final leg in a large expanded flat that began at 1.0248.
A drop below .9755 would satisfy minimum expectations but potential terminal points from various Fibonacci measurements are anywhere from .9378 to .9691.
We will watch form carefully in order to determine the best possible exit.
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency.
STRATEGY: Bearish, against .9984, target below .9755
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The AUDUSD rally from .8874 is nearing the point where it would equal the .8512-.9100 rally.
Also, the rally from .8874 appears to sport a 5th wave extension.
Near term, it appears that a new high (above .9457) is required before a larger correction (possible in wave 4) takes place.
Look for a top and reversal near .9500.
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The NZDUSD is lagging the AUDUSD.
Still, the decline from .8214 is corrective to this point and could be a small 4th wave within a 5 wave rally from .7814.
Potential support is at .8092 (38.2%) and .8066 (2/26 reaction low).
The bias remains bullish as long as price is above .7902.
A 5th wave rally should begin soon and could test .8364 (100% extension).
If the drop from .8214 turns into an impulse, then we will look to get short.
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The rally to 1.5089 this morning is probably the end of wave iii of 3 within the 5 wave rally from 1.4438.
Objectives are at 161.8% extension; which sit at 1.5129 and 1.5176.
Near term support is at 1.4981To summarize, there is still plenty of upside potential.
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STRATEGY: EXIT
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We have been off on the USDJPY lately as we have been trying to buy against various swing lows only to be stopped out, time and time again.
The entire rally from 104.97 to 108.59 could have completed a larger correction but we have subjectively favored a larger rally because of various sentiment measures.
A large complex correction may be unfolding with the drop from 108.59 as wave X in a W-X-Y.
If this is the case, then price should put in a bottom soon and begin a rally that reaches roughly 110.
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Similar to the EURUSD, the rally to 1.9970 may have completed wave iii of larger C (within the A-B-C from 1.9337).
Support may be strong at 1.9825.
If this level gives way, then look for support at 1.9750 (61.8% of 1.9615-1.9970).
Like the EURUSD, there is additional upside potential.
STRATEGY: EXIT
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We were wrong to get bullish the USDCHF.
The pair has plummeted and is now below 1.07.
Near term resistance is at 1.0763 and the next level of potential support is the psychological 1.05 figure.
STRATEGY: Bullish, against 1.0728, target TBD (above 1.1103)
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We wrote yesterday that “the minimum expectation is below .9755 and objectives are at .9691 and .9378.”
A corrective advance could reach Fibonacci resistance in the .9845-.9898 zone but lower prices lie ahead.
Risk can be moved to .9984.
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency.
STRATEGY: Bearish, against .9984, target below .9755
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We were never given the chance to get long the AUDUSD, as the pair simply ran away.
As such, the rally from .9111 is either an extended 5th wave or part of an extended 3rd wave.
Either way, a great opportunity is nearing.
We will be looking for signs of a significant reversal in the coming weeks.
Still, bullish objectives are upwards of 1.00.
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Without even paying attention to wave structure, the NZDUSD still appears to have additional upside potential.
The rally from .7781 would not even equal the .7383-.7966 rally until .8364.
Look for any decline to form correctively.
Support begins at .8125 and price should remain above .8065
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Expectations are for a bullish breakout that completes wave 5 within the 5 wave advance from 1.3261.
Simply exceeding 1.4967 would satisfy the minimum expectations.
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We wrote Friday that “the short term supporting trendline will remain intact if the rally from 1.4438 is the 5th wave that we think it is.
An objective is at 1.5126 (161.8% extension).”
To recap, the rally from 1.4438 is a 5th wave (within the 5 wave rally from 1.3261).
Wave 3 of 5 is underway from 1.4614 and wave iii of 3 may be underway from 1.4778.
With this in mind, move risk to 1.4778.
Again, objectives are above 1.50.
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STRATEGY: Bullish, against 1.4778, target 1.5119
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Longer term, we maintain that a 12 year triangle ended at 124.13 in June 2007 and that the USDJPY is headed lower for a test of its 1995 low at 81.12.
Since 124.13, the USDJPY has traced out a series of 1st and 2nd waves.
The decline should accelerate in the next month or so in wave 3 of 3.
This forecast remains intact as long as price is below 114.65.
Resistance should be strong near 110.00 (Fibo and congestion).
Visit our recently updated Yen Currency Room for specific resources geared towards this currency.
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We wrote Friday that “price could be putting in an important bottom just below 107.00.
Price is supported by a trendline drawn off of the 1/23 and 2/4 lows.
The decline from 108.35 consists of 2 equal legs as well (a common trait for a correction).”
We expect the rally to continue and for the USDJPY to test the 110 area in the next few weeks.
Potential support is at 107.60.
Visit our recently updated Yen Currency Room for specific resources geared towards this currency.
STRATEGY: Bullish, against 106.73, target TBD
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For the first time in months, the GBPUSD daily count is clear.
The pair has declined in 5 waves from 2.1160, indicating that a significant top is in place.
The 5 wave decline is viewed as either wave 1 in a 5 wave bear cycle or wave A in a 3 wave bear cycle.
In other words, longer term bearish potential is great.
The rally underway now is either wave 2 or B and we will look for a top in the 2.0033-2.0463 zone.
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We maintain that the rally from 1.9361 is wave C within the A-B-C advance from 1.9337.
Price is expected to exceed 1.9957 (wave A high) in the next few weeks before a larger wave 2 (or B) top is put in place.
Near term, wave ii of C may be complete at 1.9615.
STRATEGY: Bullish, against 1.9641, target above 1.9957
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A corrective 4th wave rally may be underway now within the 5 wave decline from the October 2006 high at 1.2768.
The USDCHF will likely trade in a choppy manner for the next month or so, but with an upside bias before a decline in a 5th wave completes the entire decline from the October 2006 high and gives way to a multi-year low.
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It is possible to count 5 wave up from 1.0728 to 1.1103.
An a-b-c decline to 1.0885 could be the first wave in a complex correction (W-X-Y).
Wave X then is underway now and is taking the form of a triangle.
A thrust lower (below 1.0885) would complete wave Y and larger wave B, which would set the stage for a C wave rally into 1.12/13.
That C wave rally may in its early stages now.
Support should be strong near 1.0800/26 (Fibo levels) if price does slip lower.
STRATEGY: Bullish, against 1.0728, target TBD (above 1.1103)
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The pattern in the USDCAD since the November low at .9055 is either an A-B-C rally that will lead to a new low (under .9055) or a 1-2 (expanded flat) base that will lead to a strong rally to new highs (suggesting that a multi-year USDCAD low is in place).
Either way, price will come below .9755.
Potential support from Fibonacci is at .9652 and .9511.
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency.
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The USDCAD resembles that of either a C or 3rd wave.
The minimum expectation is below .9755 and objectives are at .9691 and .9378.
Potential resistance is in the 1.0006/33 zone.
Risk can be moved to 1.0165.
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency.
STRATEGY: Bearish, against 1.0378, target below .9755
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The AUDUSD is in its final stages of an A-B-C rally that began in 2001.
Minimum expectations are for a new high (above .9400) but objectives are near 1.000.
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It could be that a 5 wave rally from .8874 is complete.
This would be wave 1 within a 5 wave advance that ultimately tests parity.
As long as price is above .9166, then the AUDUSD could subdivide higher.
If given the chance, we will look to get long near .9111.
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We wrote last week that “the NZDUSD trend remains up and an upside breakout will probably lead to a test of the July 2007 high at .8108.”
That breakout and test have occurred and a near term objective is at .8364.
A bigger reversal is possible (shown on the chart today…expanded flat with wave 5 top in 2005 and B wave top soon) but we would like to see evidence of a reversal on short term charts first.
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After rallying for 8 straight days, the NZDUSD is due for a correction.
The high today at .8151 is the highest this pair has been since January 1982.
While the pattern over the last month is not especially clear, look for support near the 50% of .7902-.8151 at .8027.
The 61.8% at .7997 may also provide support.
STRATEGY:
Look to get bullish near .7997/.8026, against .7902, target TBD
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A triangle as a 4th wave may be complete at the 2/7 low of 1.4438.
Expectations are for a bullish breakout that in the coming weeks that completes wave 5 within the 5 wave advance from 1.3261.
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We wrote yesterday that “there is the possibility that a rally through 1.4757 would complete 5 waves up from 1.4438 and give way to another correction.
However, it is also possible that the EURUSD is subdividing higher in a larger 3rd wave.
With this in mind, the best strategy is to keep moving the stop up.”
The short term supporting trendline will remain intact if the rally from 1.4438 is the 5th wave that we think it is.
We are presenting our revised bull count today that treats the rally from 1.4614 as a third wave.
An objective is at 1.5126 (161.8% extension).
Visit our recently updated Euro Currency Room for specific resources geared towards this currency.
STRATEGY: Bullish, against 1.4609, target 1.5119
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Longer term, we maintain that a 12 year triangle ended at 124.13 in June 2007 and that the USDJPY is headed lower for a test of its 1995 low at 81.12.
Since 124.13, the USDJPY has traced out a series of 1st and 2nd waves.
The decline should accelerate in the next month or so in wave 3 of 3.
This forecast remains intact as long as price is below 114.65.
Resistance should be strong near 110.00 (Fibo and congestion).
Visit our recently updated Yen Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-22-08techs3.gif
We still maintain that the USDJPY is still working higher, possibly towards 110.00 (Fibo and congestion).
The drop below 107.21 negated our previous count but price could be putting in an important bottom just below 107.00.
Price is supported by a trendline drawn off of the 1/23 and 2/4 lows.
The decline from 108.35 consists of 2 equal legs as well (a common trait for a correction).
Visit our recently updated Yen Currency Room for specific resources geared towards this currency.
STRATEGY: Bullish, against 106.32, target TBD
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For the first time in months, the GBPUSD daily count is clear.
The pair has declined in 5 waves from 2.1160, indicating that a significant top is in place.
The 5 wave decline is viewed as either wave 1 in a 5 wave bear cycle or wave A in a 3 wave bear cycle.
In other words, longer term bearish potential is great.
The rally underway now is either wave 2 or B and we will look for a top in the 2.0033-2.0463 zone.
This corrective rally probably lasts for weeks if not most of this month.
Also, the GBPUSD rallied for 5 consecutive days ending Thursday.
A string of consecutive days usually occurs in the beginning or middle of a strong rally.
In this case, it is likely the beginning of wave C.
Visit our recently updated British Pound Currency Room for specific resources geared towards this currency.
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It does remain our contention though that the GBPUSD is headed much higher (above 1.9957) over the next month or so; but probably not before a corrective drop in a second wave that reaches at least 1.9560 (38.2% of 1.9361-1.9687).
This is a former congestion area as well.
As the correction unfolds, we will be better able to determine when exactly we should enter long.
Visit our recently updated British Pound Currency Room for specific resources geared towards this currency.
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A corrective 4th wave rally may be underway now within the 5 wave decline from the October 2006 high at 1.2768.
The USDCHF will likely trade in a choppy manner for the next month or so, but with an upside
bias before a decline in a 5th wave completes the entire decline from the October 2006 high and gives way to a multi-year low.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-22-08techs5.gif
For the first time in months, we are taking a strong directional stand on the USDCHF.
“It is possible to count 5 wave up from 1.0728 to 1.1103.
An a-b-c decline to 1.0885 could be the first wave in a complex correction (W-X-Y).
Wave X then is underway now and is taking the form of a triangle.
A thrust lower (below 1.0885) would complete wave Y and larger wave B, which would set the stage for a C wave rally into 1.12/13.”
That C wave rally may in its early stages now.
Support should be strong near 1.0800/26 (Fibo levels) if price does slip lower still.
STRATEGY: Bullish, against 1.0728, target TBD (above 1.1103)
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-18-08techs14.gif
The pattern in the USDCAD since the November low at .9055 is either an A-B-C rally that will lead to a new low (under .9055) or a 1-2 (expanded flat) base that will lead to a strong rally to new highs (suggesting that a multi-year USDCAD low is in place).
Either way, price will come below .9755.
Potential support from Fibonacci is at .9652 and .9511.
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-22-08techs6.gif
No change to the call for a lower USDCAD.
“The rally from .9871 could reverse near the 61.8% at 1.0184 or the 78.6% at 1.0269.
One reason that we are confident in the bearish case against 1.0378 is that the rally from .9871 to 1.0124 was in 3 waves, which is countertrend.”
The reversal occurred at 1.0197 and it is probable that the USDCAD downtrend is back underway.
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency.
STRATEGY: Bearish, against 1.0378, target below .9755
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-18-08techs16.gif
As long as the AUDUSD rallies in 5 waves and declines in 3 waves, there is no reason to adopt a bearish outlook.
The rally from .8512 is expected to exceed .9400 in the coming weeks.
Objectives are near 1.00.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-22-08techs7.gif
It could be that a 5 wave rally from .8874 is complete.
This would be wave 1 within a 5 wave advance that ultimately tests parity.
As long as price is above .9166, then the AUDUSD could subdivide higher.
But with corrections expected in the GBPUSD and EURUSD and with it looking like the USDJPY is putting some sort of a bottom, we think it best to exit the AUDUSD long for now.
We will look to get back in near .9111.
STRATEGY:
EXIT
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-18-08techs18.gif
The drop on 1/22 to .7383 completed a large correction that had been underway since November.
Like the AUDUSD, the NZDUSD trend remains up and an upside breakout will probably lead to a test of the July 2007 high at .8108.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-22-08techs8.gif
Similarly with NZDUSD, a 5 wave advance appears complete at .8074.
Like the AUDUSD, this is probably a wave 1 rally that kicks off a larger 5 wave advance.
Expectations are for a corrective drop to end near .7913 (former 4th wave extreme and 61.8% of .7814-.8074).
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A triangle as a 4th wave may be complete at the 2/7 low of 1.4438.
Expectations are for a bullish breakout that in the coming weeks that completes wave 5 within the 5 wave advance from 1.3261.
Visit our recently updated Euro Currency Room for specific resources geared towards this currency.
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We are sticking with the bullish count until it is proved wrong.
What would prove it wrong?
5 waves down from 1.4757 would turn us bearish.
Until then, we are bullish.
The drop from 1.4757, although sharp, is in 3 waves and could be a 4th wave correction.
Support has come in near the former 4th wave extreme and 38.2% of 1.4482-1.4757.
Price is also supported by an unorthodox trendline.
A rally through 1.4757 would complete 5 waves up from 1.4438.
Visit our recently updated Euro Currency Room for specific resources geared towards this currency.
STRATEGY: Bullish, against 1.4531, target mid 1.50s
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-18-08techs8.gif
Longer term, we maintain that a 12 year triangle ended at 124.13 in June 2007 and that the USDJPY is headed lower for a test of its 1995 low at 81.12.
Since 124.13, the USDJPY has traced out a series of 1st and 2nd waves.
The decline should accelerate in the next month or so in wave 3 of 3.
This forecast remains intact as long as price is below 114.65.
Resistance should be strong near 110.00 (Fibo and congestion).
Visit our recently updated Yen Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-20-08techs3.gif
We maintain that the USDJPY is still working higher, possibly towards 110.00 (Fibo and congestion).
The drop from the 2/14 top was just in 3 waves, which supports the idea that the rally from 104.97 is not yet complete.
Keep risk at 107.21.
If 107.21 is given, then look for support near 106.81 (78.6%) in order to get long against 106.32.
Visit our recently updated Yen Currency Room for specific resources geared towards this currency.
STRATEGY: Bullish, against 107.21, target TBD
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-18-08techs10.gif
For the first time in months, the GBPUSD daily count is clear.
The pair has declined in 5 waves from 2.1160, indicating that a significant top is in place.
The 5 wave decline is viewed as either wave 1 in a 5 wave bear cycle or wave A in a 3 wave bear cycle.
In other words, longer term bearish potential is great.
The rally underway now is either wave 2 or B and we will look for a top in the 2.0033-2.0463 zone.
This corrective rally probably lasts for weeks if not most of this month.
Also, the GBPUSD rallied for 5 consecutive days ending Thursday.
A string of consecutive days usually occurs in the beginning or middle of a strong rally.
In this case, it is likely the beginning of wave C.
Visit our recently updated British Pound Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-20-08techs4.gif
Cable is certainly testing our nerve as bulls.
Still, our line in the sand is 1.9386.
The drop from 1.9736 to 1.9409 is best counted right now as a complex double zigzag.
Within the second zigzag, wave b is an expanding triangle (which is extremely rare).
We are looking for price to turn up more or less now.
Visit our recently updated British Pound Currency Room for specific resources geared towards this currency.
STRATEGY: Bullish, against 1.9386, target above 1.9957
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-18-08techs12.gif
A corrective 4th wave rally may be underway now within the 5 wave decline from the October 2006 high at 1.2768.
The USDCHF will likely trade in a choppy manner for the next month or so, but with an upside bias before a decline in a 5th wave completes the entire decline from the October 2006 high and gives way to a multi-year low.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-20-08techs5.gif
Luckily, we have refrained from taking a strong stand on the USDCHF lately.
The pair has traded in a diabolical fashion, spiking in both directions.
Given our bullish stance on the EURUSD (which exhibits a much clearer pattern), it seems wise to lean towards the bear side regarding the USDCHF.
If you wish to trade the USDCHF from the short side, then keep risk to 1.1045.
(see yesterday’s technical report for the bullish count)
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-18-08techs14.gif
The pattern in the USDCAD since the November low at .9055 is either an A-B-C rally that will lead to a new low (under .9055) or a 1-2 (expanded flat) base that will lead to a strong rally to new highs (suggesting that a multi-year USDCAD low is in place).
Either way, price will come below .9755.
Potential support from Fibonacci is at .9652 and .9511.
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-20-08techs6.gif
Price did spike through 1.0124 but we are still bearish against 1.0378.
The rally from .9871 could revere near the 61.8% at 1.0184 or the 78.6% at 1.0269.
One reason that we are confident in the bearish case against 1.0378 is that the rally from .9871 to 1.0124 was in 3 waves, which is countertrend.
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency.
STRATEGY: Bearish, against 1.0378, target below .9755
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-18-08techs16.gif
As long as the AUDUSD rallies in 5 waves and declines in 3 waves, there is no reason to adopt a bearish outlook.
The rally from .8512 is expected to exceed .9400 in the coming weeks.
Objectives are near 1.00.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-20-08techs7.gif
The AUDUSD is nearing support from a reaction low on 2/18 at .9102.
The drop from .9236 is either a 4th wave or within a 5 wave advance from .8874 or a 2nd wave in the 5 wave advance from .8923.
As mentioned, the .9100 figure should provide solid support to get bullish against .8923.
STRATEGY: Bullish, against .8923, target TBD
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-18-08techs18.gif
The drop on 1/22 to .7383 completed a large correction that had been underway since November.
Like the AUDUSD, the NZDUSD trend remains up and an upside breakout will probably lead to a test of the July 2007 high at .8108.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-20-08techs8.gif
The NZDUSD patterns (long term and short term) have been unclear for some time.
The worst thing to do when a chart is unclear is to force a pattern.
Still, the rally through .7966 has cleared things up.
The count that we have presented above treats the rally from .7781 to .7927 as wave 1 in a 5 wave advance.
An expanded flat follows, which has given way to wave 3.
Wave iii of 3 is probably complete or close to complete now.
The drop today presents an opportunity to get long against .7841.
STRATEGY: Bullish, against .7841, target TBD
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A triangle as a 4th wave may be complete at the 2/7 low of 1.4438.
Expectations are for a bullish breakout that in the coming weeks that completes wave 5 within the 5 wave advance from 1.3261.
Visit our recently updated Euro Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-19-08techs1.gif
The bullish count continues to prove correct.
It is possible that a 3rd wave is complete just above 1.4750 within the 5 wave advance from 1.4438.
However, we favor the idea that a third wave from 1.4482 is extending.
The next objective is the 261.8% extension at 1.4840 although it is likely that at least a short term top (a trading session or two) is in at 1.4757 (happens to be the 61.8% of 1.4953-1.4438).
Support should be strong near 1.4600/05.
Visit our recently updated Euro Currency Room for specific resources geared towards this currency.
STRATEGY: Bullish, against 1.4531, target mid 1.50s
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-18-08techs8.gif
Longer term, we maintain that a 12 year triangle ended at 124.13 in June 2007 and that the USDJPY is headed lower for a test of its 1995 low at 81.12.
Since 124.13, the USDJPY has traced out a series of 1st and 2nd waves.
The decline should accelerate in the next month or so in wave 3 of 3.
This forecast remains intact as long as price is below 114.65.
Resistance should be strong near 110.00 (Fibo and congestion).
Visit our recently updated Yen Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-19-08techs2.gif
We maintain that the USDJPY is still working higher, possibly towards 110.00 (Fibo and congestion).
The drop from the 2/14 top was just in 3 waves, which supports the idea that the rally from 104.97 is not yet complete.
Keep risk at 107.21.
If 107.21 is given, then look for support near 106.81 (78.6%) in order to get long against 106.32.
Visit our recently updated Yen Currency Room for specific resources geared towards this currency.
STRATEGY: Bullish, against 107.21, target TBD
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-18-08techs10.gif
For the first time in months, the GBPUSD daily count is clear.
The pair has declined in 5 waves from 2.1160, indicating that a significant top is in place.
The 5 wave decline is viewed as either wave 1 in a 5 wave bear cycle or wave A in a 3 wave bear cycle.
In other words, longer term bearish potential is great.
The rally underway now is either wave 2 or B and we will look for a top in the 2.0033-2.0463 zone.
This corrective rally probably lasts for weeks if not most of this month.
Also, the GBPUSD rallied for 5 consecutive days ending Thursday.
A string of consecutive days usually occurs in the beginning or middle of a strong rally.
In this case, it is likely the beginning of wave C.
Visit our recently updated British Pound Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-19-08techs3.gif
Near term, the rally from 1.9386 is in 9 waves, which is an impulse and indicates that the trend is up.
The quick drop to 1.9453 can be counted as a zigzag, which is a correction.
Wave c of the zigzag equals wave a (at 1.9465); a common relationship.
Expectations are for price to exceed 1.9957 in the coming weeks in wave C within the A-B-C rally from 1.9337.
This is a good opportunity to add to or initiate GBP longs.
Visit our recently updated British Pound Currency Room for specific resources geared towards this currency.
STRATEGY: Bullish, against 1.9386, target above 1.9957
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-18-08techs12.gif
A corrective 4th wave rally may be underway now within the 5 wave decline from the October 2006 high at 1.2768.
The USDCHF will likely trade in a choppy manner for the next month or so, but with an upside bias before a decline in a 5th wave completes the entire decline from the October 2006 high and gives way to a multi-year low.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-19-08techs4.gif
Luckily, we have refrained from taking a strong stand on the USDCHF lately.
The pair has traded in a diabolical fashion, spiking in both directions.
Given our bullish stance on the EURUSD (which exhibits a much clearer pattern), it seems wise to lean towards the bear side regarding the USDCHF.
If you wish to trade the USDCHF from the short side, then keep risk to 1.1045.
(see yesterday’s technical report for the bullish count)
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-18-08techs14.gif
The pattern in the USDCAD since the November low at .9055 is either an A-B-C rally that will lead to a new low (under .9055) or a 1-2 (expanded flat) base that will lead to a strong rally to new highs (suggesting that a multi-year USDCAD low is in place).
Either way, price will come below .9755.
Potential support from Fibonacci is at .9652 and .9511.
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-19-08techs5.gif
The decline from 1.0378 is clearly a 5 wave decline and an a-b-c corrective rally could be done at 1.0128 -- very near the former 4th wave and 50% of 1.0378-.9872.
If a larger upward correction is underway, then a test of the 61.8% at 1.0184 is possible.
However, our stance is that the larger decline has resumed and that price is headed below .9755 is coming weeks.
Near term, a spike through 1.0142 may be required before the bear leg accelerates.
In this instance, look to get short near 1.0175/85.
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency.
STRATEGY: Bearish, against 1.0128, target below .9755
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-18-08techs16.gif
As long as the AUDUSD rallies in 5 waves and declines in 3 waves, there is no reason to adopt a bearish outlook.
The rally from .8512 is expected to exceed .9400 in the coming weeks.
Objectives are near 1.00.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-19-08techs6.gif
There is no reason to alter the count that treats the rally from .8923 as wave 3 within the 5 wave advance from .8874.
We wrote yesterday that “this is a very bullish count and the AUDUSD could really accelerate now, especially since the pair has broken through .9100.”
The acceleration has taken place and the next objective is a 161.8% extension at .9262 (fairly close to current level).
The move looks extended so bulls should lighten up their position.
Initial support is at .9182.
STRATEGY: EXIT
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-18-08techs18.gif
The drop on 1/22 to .7383 completed a large correction that had been underway since November.
Like the AUDUSD, the NZDUSD trend remains up and an upside breakout will probably lead to a test of the July 2007 high at .8108.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-19-08techs7.gif
The NZDUSD patterns (long term and short term) have been unclear for some time.
The worst thing to do when a chart is unclear is to force a pattern.
Still, the rally through .7966 has cleared things up.
The count that we have presented above treats the rally from .7781 to .7927 as wave 1 in a 5 wave advance.
An expanded flat follows, which has given way to wave 3.
Wave iii of 3 is probably complete or close to complete now.
At the current juncture, there is not a good entry point.
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ELLIOTT WAVE VIEW
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs6.gif
A triangle as a 4th wave may be complete at the 2/7 low of 1.4438.Expectations are for a bullish breakout that in the coming weeks that completes wave 5 within the 5 wave advance from 1.3261.
Visit our recently updated Euro Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-15-08techs2.gif
Recent commentary has focused on the ideas that “it looks as if the EURUSD could explode higher any moment now, given that the rally from 1.4438 may be a series of 1st and 2nd waves -- a common pattern that occurs before a big move.”
As long as the market continues to prove us correct, there is little reason to exit -- especially if it looks as if a third wave is underway.
Risk can be moved to 1.4531.
Visit our recently updated Euro Currency Room for specific resources geared towards this currency.
STRATEGY: Bullish, against 1.4531, target mid 1.50s
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs8.gif
Longer term, we maintain that a 12 year triangle ended at 124.13 in June 2007 and that the USDJPY is headed lower for a test of its 1995 low at 81.12. Since 124.13, the USDJPY has traced out a series of 1st and 2nd waves. The decline should accelerate in the next month or 2 in wave 3 of 3. This forecast remains intact as long as price is below 114.65.
Visit our recently updated Yen Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-15-08techs3.gif
We have focused on a 61.8% Fibonacci is at 108.50 as a possible reversal point but have also mentioned that “due to the EW structure on the daily, COT data suggests that a more pronounced rally is possible if not probable.”
An alternate count is in red and suggests that the USDJPY will exceed 110.11 before bearish potential.
One reason that we think a bigger rally is underway is that the structure from 104.97 looks far from complete -- as do the rallies in the Yen crosses.
Keep risk at 106.99 and potential support is in the 107.30/50 zone.
It is possible that a significant top is in place at 108.59.
However, there is no trade from the short side until we see 5 waves down from this level followed by a 3 wave rally.
Visit our recently updated Yen Currency Room for specific resources geared towards this currency.
STRATEGY: Bullish, against 106.99, target TBD
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs10.gif
For the first time in months, the GBPUSD daily count is clear. The pair has declined in 5 waves from 2.1160, indicating that a significant top is in place. The 5 wave decline is viewed as either wave 1 in a 5 wave bear cycle or wave A in a 3 wave bear cycle. In other words, longer term bearish potential is great. The rally underway now is either wave 2 or B and we will look for a top in the 2.0033-2.0463 zone. This corrective rally probably lasts for weeks if not most of this month.
Visit our recently updated British Pound Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-15-08techs4.gif
We maintain that “the count from 1.9386 is impulsive but far from complete.
The next level of potential resistance is at 1.9787.”
The GBPUSD has come into former support from reaction lows at 1.9595 and 1.9613.
The low today (1.9599) could be the end of a 4th wave.
In summary, we remain bullish as long as the decline from 1.9736 does not trace out 5 waves.
Visit our recently updated British Pound Currency Room for specific resources geared towards this currency.
STRATEGY: Bullish, against 1.9548, target above 1.9957
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs12.gif
A corrective 4th wave rally may be underway now within the 5 wave decline from the October 2006 high at 1.2768. The USDCHF will likely trade in a choppy manner for the next month or so, but with an upside bias before a decline in a 5th wave completes the entire decline from the October 2006 high and gives way to a multi-year low.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-15-08techs5.gif
A triangle is the pattern that we have suspected may be unfolding in the USDCHF.
In this case, “expect price to work lower in a choppy manner towards the mid 1.08s over the next few weeks.”
The drop from 1.1105 is in 5 waves, therefore a rally to at least former resistance at 1.0986 is expected.
The alternate count (in red) suggests that a significant low may be in place.
The best way to play this would be with a breakout strategy through 1.1105.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs14.gif
The pattern in the USDCAD since the November low at .9055 is either an A-B-C rally that will lead to a new low (under .9055) or a 1-2 (expanded flat) base that will lead to a strong rally to new highs (suggesting that a multi-year USDCAD low is in place). Either way, price will come below .9755. Potential support from Fibonacci is at .9652 and .9511.
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-15-08techs6.gif
The decline from 1.0378 is clearly a 5 wave decline and an a-b-c corrective rally could be done at 1.0128 -- very near the former 4th wave and 50% of 1.0378-.9872.
If a larger upward correction is underway, then a test of the 61.8% at 1.0184 is possible.
However, our stance is that the larger decline has resumed and that price is headed below .9755 is coming weeks.
Near term, a spike through 1.0142 may be required before the bear leg accelerates.
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency.
STRATEGY: Bearish, against 1.0128, target below .9755
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs16.gif
As long as the AUDUSD rallies in 5 waves and declines in 3 waves, there is no reason to adopt a bearish outlook. The rally from .8512 is expected to exceed .9400 in the coming weeks. Objectives are near 1.00.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-15-08techs7.gif
We were concerned yesterday because the decline from .9084 to .8923 appears to be in 5 waves, which would be bearish.
This is no longer of concern to us as bulls since .9084 has been exceeded.
At this point, risk can be moved to .9004.
Remember, our objective is in the mid .90s.
STRATEGY: Bullish, against .9004, target TBD
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs18.gif
The drop on 1/22 to .7383 completed a large correction that had been underway since November. Like the AUDUSD, the NZDUSD trend remains up and an upside breakout will probably lead to a test of the July 2007 high at .8108.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-15-08techs8.gif
NZDUSD continues to range and may be forming a triangle.
Since triangles are continuation patterns, then we would expect the break to occur to the upside.
However, it is unclear where a triangle would fit in the larger pattern.
Also, the decline from .7966 to .7781 is in 5 waves and the rally from .7781 was an a-b-c rally with wave b as a triangle.
The decline from .7956-.7814 is best counted as in 5 waves; and not having established a new low suggests that price will come under .7814 and then .7781 in coming days.
STRATEGY: Bearish, against .7917, target below .7781
http://www.dailyfx.com/forum/images/moderator3.gif Tell us what you think about this report: contact the strategist about the article at jsaettele@dailyfx.com
ELLIOTT WAVE VIEW
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs6.gif
A triangle as a 4th wave may be complete at the 2/7 low of 1.4438.Expectations are for a bullish breakout that in the coming weeks that completes wave 5 within the 5 wave advance from 1.3261.
Visit our recently updated Euro Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-14-08techs2.gif
We maintain that a triangle is complete at 1.4438. Recent commentary has focused on the ideas that “it looks as if the EURUSD could explode higher any moment now, given that the rally from 1.4438 may be a series of 1st and 2nd waves -- a common pattern that occurs before a big move.” The big move is probably under way now. Risk can be moved to 1.4482 but ideally price remains above 1.4531.
Visit our recently updated Euro Currency Room for specific resources geared towards this currency.
STRATEGY: Bullish, against 1.4531, target mid 1.50s
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs8.gif
Longer term, we maintain that a 12 year triangle ended at 124.13 in June 2007 and that the USDJPY is headed lower for a test of its 1995 low at 81.12. Since 124.13, the USDJPY has traced out a series of 1st and 2nd waves. The decline should accelerate in the next month or 2 in wave 3 of 3. This forecast remains intact as long as price is below 114.65.
Visit our recently updated Yen Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-14-08techs3.gif
Keep it simple -- the USDJPY has consolidated for in a tight range for nearly a month now and looks ready to break higher.
“After spending nearly a month in a tight range, the USDJPY is poised to break higher and test at least the mid 108s.
A 61.8% Fibonacci is at 108.50 and a former congestion area is at 108.30.
Although we remain long term bears due to the EW structure on the daily, COT data suggests that a more pronounced rally is possible if not probable.”
An alternate count is in red and suggests that the USDJPY will exceed 110.11 before bearish potential.
One reason that we think a bigger rally is underway is that the structure from 104.97 looks far from complete -- as do the rallies in the Yen crosses.
Risk can be moved to 106.99.
Potential support is at 108.
Visit our recently updated Yen Currency Room for specific resources geared towards this currency.
STRATEGY: Bullish, against 106.99, target TBD
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs10.gif
For the first time in months, the GBPUSD daily count is clear. The pair has declined in 5 waves from 2.1160, indicating that a significant top is in place. The 5 wave decline is viewed as either wave 1 in a 5 wave bear cycle or wave A in a 3 wave bear cycle. In other words, longer term bearish potential is great. The rally underway now is either wave 2 or B and we will look for a top in the 2.0033-2.0463 zone. This corrective rally probably lasts for weeks if not most of this month.
Visit our recently updated British Pound Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-14-08techs4.gif
We wrote yesterday that “the advance from 1.9386 could be a series of 1st and 2nd waves, so an ‘explosion’ higher this week seems possible if not likely.
Cable’s ‘explosion’ appears to be underway.
Ideally, price remains above 1.9548 and the GBPUSD takes off in a 3rd wave.”
The count from 1.9386 is impulsive but far from complete.
The next level of potential resistance is at 1.9787.
Risk can be moved to 1.9548
Visit our recently updated British Pound Currency Room for specific resources geared towards this currency.
STRATEGY: Bullish, against 1.9548, target above 1.9957
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs12.gif
A corrective 4th wave rally may be underway now within the 5 wave decline from the October 2006 high at 1.2768. The USDCHF will likely trade in a choppy manner for the next month or so, but with an upside bias before a decline in a 5th wave completes the entire decline from the October 2006 high and gives way to a multi-year low.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-14-08techs5.gif
A triangle is probably unfolding right now in the USDCHF.
The decline from the 1/22 high at 1.1122 is in 3 waves (A-B-C zigzag) and the rally from the 2/1 low at 1.0728 is also in 3 waves (complex W-X-Y advance).
Expect price to work lower in a choppy manner towards the mid 1.08s over the next few weeks.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs14.gif
The pattern in the USDCAD since the November low at .9055 is either an A-B-C rally that will lead to a new low (under .9055) or a 1-2 (expanded flat) base that will lead to a strong rally to new highs (suggesting that a multi-year USDCAD low is in place). Either way, price will come below .9755. Potential support from Fibonacci is at .9652 and .9511.
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-14-08techs6.gif
The decline from 1.0378 is clearly a 5 wave decline and an a-b-c corrective rally could be done at 1.0128 -- very near the former 4th wave and 50% of 1.0378-.9872.
If a larger upward correction is underway, then a test of the 61.8% at 1.0184 is possible.
However, our stance is that the larger decline has resumed and that price is headed below .9755 is coming weeks.
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency.
STRATEGY: Bearish, against 1.0128, target below .9755
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs16.gif
As long as the AUDUSD rallies in 5 waves and declines in 3 waves, there is no reason to adopt a bearish outlook. The rally from .8512 is expected to exceed .9400 in the coming weeks. Objectives are near 1.00.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-14-08techs7.gif
We wrote yesterday that “this count implies that wave 3 up is underway now and that the rally should accelerate.
The rally has yet to do that, which calls into question our count.
Still, as long as price is above .8817, we remain bulls.
This setback in the AUDUSD presents a great bullish opportunity against .8874.”
The AUDUSD has rallied nicely this morning but the decline from .9084 to .8923 appears to be in 5 waves, which would be bearish.
As long as our bullish levels remain intact, there is no reason to change our outlook.
At this point, risk can be moved to .8923 (from .8874).
STRATEGY: Bullish (now is a good time to initiate or add to this position), against .8923, target TBD
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs18.gif
The drop on 1/22 to .7383 completed a large correction that had been underway since November. Like the AUDUSD, the NZDUSD trend remains up and an upside breakout will probably lead to a test of the July 2007 high at .8108.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-14-08techs8.gif
Another reason to be wary of the AUDUSD rally is that the NZDUSD structure looks bearish.
The decline from .7966 to .7781 is in 5 waves and the rally from .7781 was an a-b-c rally with wave b as a triangle.
The decline from .7956-.7814 is best counted as in 5 waves; and not having established a new low suggests that price will come under .7814 and then .7781 in coming days.
http://www.dailyfx.com/forum/images/moderator3.gif Tell us what you think about this report: contact the strategist about the article at jsaettele@dailyfx.com
ELLIOTT WAVE VIEW
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs6.gif
A triangle as a 4th wave may be complete at the 2/7 low of 1.4438.Expectations are for a bullish breakout that in the coming weeks that completes wave 5 within the 5 wave advance from 1.3261.
Visit our recently updated Euro Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-13-08techs1.gif
Wave E of the triangle has taken the form of a zigzag. One could also make the argument that the decline from 1.4953 is a 5 wave decline and that the larger trend has turned.Even under this scenario, price should rally to at least 1.4589-1.4670 before the next bearish leg. As long as price is above 1.4438, maintain a bullish stance. It looks as if the EURUSD could explode higher any moment now, given that the rally from 1.4438 may be a series of 1st and 2nd waves -- a common pattern that occurs before a big move.
Visit our recently updated Euro Currency Room for specific resources geared towards this currency.
STRATEGY: Bullish, against 1.4364, target mid 1.50s
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs8.gif
Longer term, we maintain that a 12 year triangle ended at 124.13 in June 2007 and that the USDJPY is headed lower for a test of its 1995 low at 81.12. Since 124.13, the USDJPY has traced out a series of 1st and 2nd waves. The decline should accelerate in the next month or 2 in wave 3 of 3. This forecast remains intact as long as price is below 114.65.
Visit our recently updated Yen Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-13-08techs2.gif
Keep it simple -- the USDJPY has consolidated for in a tight range for nearly a month now and looks ready to break higher.“After spending nearly a month in a tight range, the USDJPY is poised to break higher and test at least the mid 108s. A 61.8% Fibonacci is at 108.50 and a former congestion area is at 108.30. Although we remain long term bears due to the EW structure on the daily, COT data suggests that a more pronounced rally is possible if not probable.”
Visit our recently updated Yen Currency Room for specific resources geared towards this currency.
STRATEGY: Bullish, against 106.50, target TBD
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs10.gif
For the first time in months, the GBPUSD daily count is clear. The pair has declined in 5 waves from 2.1160, indicating that a significant top is in place. The 5 wave decline is viewed as either wave 1 in a 5 wave bear cycle or wave A in a 3 wave bear cycle. In other words, longer term bearish potential is great. The rally underway now is either wave 2 or B and we will look for a top in the 2.0033-2.0463 zone. This corrective rally probably lasts for weeks if not most of this month.
Visit our recently updated British Pound Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-13-08techs3.gif
Larger wave B is complete in the form of a double zigzag. Expectations are for price to exceed 1.9957 in the coming weeks in wave C within the A-B-C rally from 1.9337. We wrote yesterday that “the advance from 1.9386 could be a series of 1st and 2nd waves, so an ‘explosion’ higher this week seems possible if not likely.”Cable’s ‘explosion’ appears to be underway. Ideally, price remains above 1.9548 and the GBPUSD takes off in a 3rd wave.Still, 1.9441 is our bullish ‘line in the sand’.
Visit our recently updated British Pound Currency Room for specific resources geared towards this currency.
STRATEGY: Bullish, against 1.9441, target above 1.9957
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs12.gif
A corrective 4th wave rally may be underway now within the 5 wave decline from the October 2006 high at 1.2768. The USDCHF will likely trade in a choppy manner for the next month or so, but with an upside bias before a decline in a 5th wave completes the entire decline from the October 2006 high and gives way to a multi-year low.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-13-08techs4.gif
We are unsure of the pattern unfolding in the USDCHF. “A triangle could be in its early stages right now in the USDCHF. The decline from the 1/22 high at 1.1122 is in 3 waves and the rally from the 2/1 low at 1.0728 is also in 3 waves (to this point).” Another possibility is that an expanded flat is underway, which would require a rally through 1.1122 before being considered complete.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs14.gif
The pattern in the USDCAD since the November low at .9055 is either an A-B-C rally that will lead to a new low (under .9055) or a 1-2 (expanded flat) base that will lead to a strong rally to new highs (suggesting that a multi-year USDCAD low is in place). Either way, price will come below .9755. Potential support from Fibonacci is at .9652 and .9511.
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-13-08techs5.gif
The decline from 1.0378 is clearly a 5 wave decline and an a-b-c corrective rally could be done at 1.0128 -- very near the former 4th wave and 50% of 1.0378-.9872. If a larger upward correction is underway, then a test of the 61.8% at 1.0184 is possible. However, our stance is that the larger decline has resumed and that price is headed below .9755 is coming weeks.
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency.
STRATEGY: Bearish, against 1.0128, target below .9755
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs16.gif
As long as the AUDUSD rallies in 5 waves and declines in 3 waves, there is no reason to adopt a bearish outlook. The rally from .8512 is expected to exceed .9400 in the coming weeks. Objectives are near 1.00.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-13-08techs6.gif
Recent commentary states that “we do think that the rally from .8512 to .9014 completed wave 1 in a larger 5 wave bullish cycle and that the decline from .9014 to .8817 completed wave 2 of that cycle. This count implies that wave 3 up is underway now and that the rally should accelerate. The rally has yet to do that, which calls into question our count. Still, as long as price is above .8817, we remain bulls.” This setback in the AUDUSD presents a great bullish opportunity against .8874.
STRATEGY: Bullish (now is a good time to initiate or add to this position), against .8874, target TBD
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs18.gif
The drop on 1/22 to .7383 completed a large correction that had been underway since November. Like the AUDUSD, the NZDUSD trend remains up and an upside breakout will probably lead to a test of the July 2007 high at .8108.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-13-08techs7.gif
We wrote yesterday that the “decline from .7966 to .7781 is in 5 waves. This suggests that another 5 wave decline will occur. The rally from .7781 could be an a-b-c rally with wave b as a triangle; which supports a short term bearish bias. Our confidence in the pattern is low though given that the AUDUSD favors dollar weakness (after a brief period of Aussie weakness). If what we are seeing is correct, then the AUDNZD may be ready to break out to the upside.”
http://www.dailyfx.com/forum/images/moderator3.gif Tell us what you think about this report: contact the strategist about the article at jsaettele@dailyfx.com
ELLIOTT WAVE VIEW
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs6.gif
A triangle as a 4th wave may be complete at the 2/7 low of 1.4438.Expectations are for a bullish breakout that in the coming weeks that completes wave 5 within the 5 wave advance from 1.3261.
Visit our recently updated Euro Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs7.gif
Wave E of the triangle has taken the form of a zigzag.One could also make the argument that the decline from 1.4953 is a 5 wave decline and that the larger trend has turned.Even under this scenario, price should rally to at least 1.4589-1.4670 before the next bearish leg.As long as price is above 1.4438, maintain a bullish stance.It looks as if the EURUSD could explode higher any moment now.
Visit our recently updated Euro Currency Room for specific resources geared towards this currency.
STRATEGY: Bullish, against 1.4364, target mid 1.50s
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs8.gif
Longer term, we maintain that a 12 year triangle ended at 124.13 in June 2007 and that the USDJPY is headed lower for a test of its 1995 low at 81.12. Since 124.13, the USDJPY has traced out a series of 1st and 2nd waves. The decline should accelerate in the next month or 2 in wave 3 of 3. This forecast remains intact as long as price is below 114.65.
Visit our recently updated Yen Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs9.gif
After spending nearly a month in a tight range, the USDJPY is poised to break higher and test at least the mid 108s. A 61.8% Fibonacci is at 108.50 and a former congestion area is at 108.30. Although we remain long term bears due to the EW structure on the daily, COT data suggests that a more pronounced rally is possible if not probable.
Visit our recently updated Yen Currency Room for specific resources geared towards this currency.
STRATEGY: Bullish, against 106.32, target TBD
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs10.gif
For the first time in months, the GBPUSD daily count is clear. The pair has declined in 5 waves from 2.1160, indicating that a significant top is in place. The 5 wave decline is viewed as either wave 1 in a 5 wave bear cycle or wave A in a 3 wave bear cycle. In other words, longer term bearish potential is great. The rally underway now is either wave 2 or B and we will look for a top in the 2.0033-2.0463 zone. This corrective rally probably lasts for weeks if not most of this month.
Visit our recently updated British Pound Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs11.gif
We maintain that a larger B wave may be complete in the form of a double zigzag. Expectations are for price to exceed 1.9957 in the coming weeks in wave C within the A-B-C rally from 1.9337. Very short term, the advance from 1.9386 could be a series of 1st and 2nd waves, so an ‘explosion’ higher this week seems possible if not likely.
Visit our recently updated British Pound Currency Room for specific resources geared towards this currency.
STRATEGY: Bullish, against 1.9386, target above 1.9957
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs12.gif
A corrective 4th wave rally may be underway now within the 5 wave decline from the October 2006 high at 1.2768. The USDCHF will likely trade in a choppy manner for the next month or so, but with an upside bias before a decline in a 5th wave completes the entire decline from the October 2006 high and gives way to a multi-year low.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs13.gif
We are unsure of the pattern unfolding in the USDCHF. “A triangle could be in its early stages right now in the USDCHF. The decline from the 1/22 high at 1.1122 is in 3 waves and the rally from the 2/1 low at 1.0728 is also in 3 waves (to this point).” Another possibility is that an expanded flat is underway, which would require a rally through 1.1122 before being considered complete.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs14.gif
The pattern in the USDCAD since the November low at .9055 is either an A-B-C rally that will lead to a new low (under .9055) or a 1-2 (expanded flat) base that will lead to a strong rally to new highs (suggesting that a multi-year USDCAD low is in place). Either way, price will come below .9755. Potential support from Fibonacci is at .9652 and .9511.
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs15.gif
The decline from 1.0378 is clearly a 5 wave decline and an a-b-c corrective rally could be done at 1.0128 -- very near the former 4th wave and 50% of 1.0378-.9872. If a larger upward correction is underway, then a test of the 61.8% at 1.0184 is possible. However, our stance is that the larger decline has resumed and that price is headed below .9755 is coming weeks.
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency.
STRATEGY: Bearish, against 1.0128, target below .9755
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs16.gif
As long as the AUDUSD rallies in 5 waves and declines in 3 waves, there is no reason to adopt a bearish outlook. The rally from .8512 is expected to exceed .9400 in the coming weeks. Objectives are near 1.00.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs17.gif
Recent commentary states that “we do think that the rally from .8512 to .9014 completed wave 1 in a larger 5 wave bullish cycle and that the decline from .9014 to .8817 completed wave 2 of that cycle. This count implies that wave 3 up is underway now and that the rally should accelerate. The rally has yet to do that, which calls into question our count. Still, as long as price is above .8817, we remain bulls.”The bull case is reinforced by the 5 wave advance from .8874.Look for support near .9016 in order to initiate or add to longs.
STRATEGY: Bullish, against .8874, target TBD
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs18.gif
The drop on 1/22 to .7383 completed a large correction that had been underway since November. Like the AUDUSD, the NZDUSD trend remains up and an upside breakout will probably lead to a test of the July 2007 high at .8108.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-12-08techs19.gif
One can make the case that a larger decline is underway from .7966 because the decline from .7966 to .7781 is in 5 waves. This suggests that another 5 wave decline will occur. The rally from .7781 could be an a-b-c rally with wave b as a triangle; which supports a short term bearish bias.Our confidence in the pattern is low though given that the AUDUSD favors dollar weakness (after a brief period of Aussie weakness).If what we are seeing is correct, then the AUDNZD may be ready to break out to the upside.
STRATEGY is a quick summary of our best technical ideas. The ideas are subjective and are subject to change everyday although trades are typically held for at least a few days and sometimes a few weeks or more. Ideas are also included for crosses throughtout the week; these are published at separate articles at DailyFX.
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). Optimal entries, risk, and targets are based on traditional pivot formulas that calculate R3, R2, R1, P, S1, S2, and S3. These are objective measures and our subjective analysis (STRATEGY) may differ.
SENTIMENT ANALYSIS takes into account COT reports and analysis of news headlines. Studies done by Jamie Saettele (to be published in an upcoming book) indicate that the greatest number of headlines and the most negative headlines about a currency appear at bottoms and that the greatest number of headlines and the most positive headlines about a currency appear at tops.
ELLIOTT WAVE VIEW is our assessment of both the longer term (DAILY BARS) and shorter term (60 MINUTE BARS) EW structure. This is the basis for our STRATEGY.
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http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-08-08techs2.gif
We maintain that the decline from the November 2007 high at 1.4966 is the wave 3 top within a 5 wave advance from the June 2007 low at 1.3261. Since 1.4966, the EURUSD is either in the final stages of a triangle or is tracing out a larger flat correction.Either way, higher prices are expected in the coming weeks with objectives in the mid 1.50s. This could complete larger wave 3 within the 5 wave advance from the November 2005 low at 1.1638.
Visit our recently updated Euro Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-08-08techs3.gif
IF a triangle has been unfolding from the November high at 1.4966, then the pattern is complete or very close to complete. Wave E of the triangle has taken the form of a zigzag. A slight new low is possible but price should remain above 1.4365. Even if a larger turn did occur at 1.4950, then a corrective rally is expected to at least 1.4650.
Visit our recently updated Euro Currency Room for specific resources geared towards this currency.
STRATEGY: Bullish, against 1.4364, target mid 1.50s
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-08-08techs4.gif
IF a triangle has been unfolding from the November high at 1.4966, then the pattern is complete or very close to complete. Wave E of the triangle has taken the form of a zigzag. A slight new low is possible but price should remain above 1.4365. Even if a larger turn did occur at 1.4950, then a corrective rally is expected to at least 1.4650.
Visit our recently updated Euro Currency Room for specific resources geared towards this currency.
STRATEGY: Bullish, against 1.4364, target mid 1.50s
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-08-08techs5.gif
After spending nearly a month in a tight range, the USDJPY is poised to break higher and test at least the mid 108s. A 61.8% Fibonacci is at 108.50 and a former congestion area is at 108.30. Although we remain long term bears due to the EW structure on the daily, COT data suggests that a more pronounced rally is possible if not probable.
Visit our recently updated Yen Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-08-08techs6.gif
For the first time in months, the GBPUSD daily count is clear. The pair has declined in 5 waves from 2.1160, indicating that a significant top is in place. The 5 wave decline is viewed as either wave 1 in a 5 wave bear cycle or wave A in a 3 wave bear cycle. In other words, longer term bearish potential is great. The rally underway now is either wave 2 or B and we will look for a top in the 2.0033-2.0463 zone. This corrective rally probably lasts for weeks if not most of this month.
Visit our recently updated British Pound Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-08-08techs7.gif
We have focused on the idea that a large B wave was coming to an end.We maintain that stance as the B wave may be complete in the form of a double zigzag.Expectations are for price to exceed 1.9957 in the coming weeks in wave C within the A-B-C rally from 1.9337.
Visit our recently updated British Pound Currency Room for specific resources geared towards this currency.
STRATEGY: Bullish, against 1.9335, target above 1.9957
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-08-08techs8.gif
A corrective 4th wave rally may be underway now within the 5 wave decline from the October 2006 high at 1.2768. The USDCHF will likely trade in a choppy manner for the next month or so, but with an upside bias before a decline in a 5th wave completes the entire decline from the October 2006 high and gives way to a multi-year low.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-08-08techs9.gif
We are unsure of the pattern unfolding in the USDCHF.“A triangle could be in its early stages right now in the USDCHF. The decline from the 1/22 high at 1.1122 is in 3 waves and the rally from the 2/1 low at 1.0728 is also in 3 waves (to this point).”Another possibility is that an expanded flat is underway, which would require a rally through 1.1122 before being considered complete.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-08-08techs10.gif
The pattern in the USDCAD since the November low at .9055 is either an A-B-C rally that will lead to a new low (under .9055) or a 1-2 (expanded flat) base that will lead to a strong rally to new highs (suggesting that a multi-year USDCAD low is in place). Either way, price will come below .9755. Potential support from Fibonacci is at .9652 and .9511.
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-08-08techs11.gif
We wrote yesterday that “the short term picture is clear. The decline from 1.0378 is clearly a 5 wave decline and an a-b-c corrective rally is underway now towards 1.0117. The next level of resistance is Fibonacci resistance at 1.0184. Look for a top and reversal near these levels in order to position for a drop below .9755.” Look for a spike through 1.0102 that would complete the rally from .9871.” The larger decline has resumed.
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency.
STRATEGY: Bearish, against 1.0128, target below .9755
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-08-08techs12.gif
As long as the AUDUSD rallies in 5 waves and declines in 3 waves, there is no reason to adopt a bearish outlook. The rally from .8512 is expected to exceed .9400 in the coming weeks. Objectives are near 1.00.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-08-08techs13.gif
We do think that the rally from .8512 to .9014 completed wave 1 in a larger 5 wave bullish cycle and that the decline from .9014 to .8817 completed wave 2 of that cycle. This count implies that wave 3 up is underway now and that the rally should accelerate. The rally has yet to do that, which calls into question our count. Still, as long as price is above .8817, we remain bulls.
STRATEGY: Get bullish near .8915, against .8874, target TBD
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-08-08techs14.gif
The drop on 1/22 to .7383 completed a large correction that had been underway since November. Like the AUDUSD, the NZDUSD trend remains up and an upside breakout will probably lead to a test of the July 2007 high at .8108.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-08-08techs15.gif
One can make the case that a larger decline is underway from .7966 because the decline from .7966 to .7781 is in 5 waves. This suggests that another 5 wave decline is underway now, towards at least .7742 (100% extension) and .7628 (161.8% extension).
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We maintain that the decline from the November 2007 high at 1.4966 is the wave 3 top within a 5 wave advance from the June 2007 low at 1.3261. Since 1.4966, the EURUSD has either completed a flat as wave 4 or a triangle is still unfolding as wave 4. Either way, higher prices are expected in the coming weeks with objectives in the mid 1.50s. This could complete larger wave 3 within the 5 wave advance from the November 2005 low at 1.1638.
Visit our recently updated Euro Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-07-08techs2.gif
We wrote yesterday that “with 5 waves down from the wave D high, expect a rally in wave b of E to at least 1.4729 (38.2% of 1.4953-1.4591) before wave E ends closer to the mid 1.4400s.” That rally has yet to begin as the EURUSD has fallen below 1.4591 to test 1.4550 this morning. Still, at least a corrective bounce is expected to test 1.4670 and probably 1.4700 over the next day or two.
Visit our recently updated Euro Currency Room for specific resources geared towards this currency.
STRATEGY: 50% Long triggered at 1.4595, risk is at 1.4509, target 1.4730 (the big opportunity comes on the drop to the mid 1.44s)
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-04-08techs7.gif
Longer term, we maintain that a 12 year triangle ended at 124.13 in June 2007 and that the USDJPY is headed lower for a test of its 1995 low at 81.12. Since 124.13, the USDJPY has traced out a series of 1st and 2nd waves. The decline should accelerate in the next month in wave 3 of 3. This forecast remains intact as long as price is below 114.65.
Visit our recently updated Yen Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-07-08techs4.gif
We maintain that the strong rally from 104.97 is a c wave that will complete a larger second wave as an expanded flat. Price is expected to exceed 107.92 and resistance should be strong in the 108.33/50 area. Look for a top and reversal near there. This count is intact as long a price is below 110.11.
Visit our recently updated Yen Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-04-08techs9.gif
For the first time in months, the GBPUSD daily count is clear. The pair has declined in 5 waves from 2.1160, indicating that a significant top is in place. The 5 wave decline is viewed as either wave 1 in a 5 wave bear cycle or wave A in a 3 wave bear cycle. In other words, longer term bearish potential is great. The rally underway now is either wave 2 or B and we will look for a top in the 2.0033-2.0463 zone. This corrective rally probably lasts for weeks if not most of this month.
Visit our recently updated British Pound Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-07-08techs6.gif
The rally from 1.9337 to 1.9957 is a 5 wave advance and is probably wave A within the A-B-C corrective rally. Wave B has unfolded as a double zigzag complex correction and is probably close to complete now. In fact, wave Y of the zigzag is equal to wave W of the zigzag near current price. Equality within a zigzag is common. Considering that we expect a much larger correction of the 2.1160-1.9337 decline and that the advance from 1.9337 is in 5 waves, a cautious bullish position is warranted.
Visit our recently updated British Pound Currency Room for specific resources geared towards this currency.
Strategy: 50% Long triggered at 1.9445, against 1.9335, target 1.97/1.98
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-04-08techs11.gif
A corrective 4th wave rally may be underway now within the 5 wave decline from the October 2006 high at 1.2768. The USDCHF will likely trade in a choppy manner for the next month or so, but with an upside bias before a decline in a 5th wave completes the entire decline from the October 2006 high and gives way to a multi-year low.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-07-08techs8.gif
A triangle could be in its early stages right now in the USDCHF. The decline from the 1/22 high at 1.1122 is in 3 waves and the rally from the 2/1 low at 1.0728 is also in 3 waves (to this point). Legs of triangles unfold in 3 waves so if a triangle is underway from the 1/22 high, then expect the next move to look something like what the arrows show on the chart above.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-04-08techs13.gif
The pattern in the USDCAD since the November low at .9055 is either an A-B-C rally that will lead to a new low (under .9055) or a 1-2 (expanded flat) base that will lead to a strong rally to new highs (suggesting that a multi-year USDCAD low is in place). Either way, price will come below .9755. Potential support from Fibonacci is at .9652 and .9511.
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-07-08techs10.gif
We wrote yesterday that “the short term picture is clear. The decline from 1.0378 is clearly a 5 wave decline and an a-b-c corrective rally is underway now towards 1.0117. The next level of resistance is Fibonacci resistance at 1.0184. Look for a top and reversal near these levels in order to position for a drop below .9755.” Look for a spike through 1.0102 that would complete the rally from .9871.”The high today is at 1.0124 and additional resistance is at 1.0184.
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency.
STRATEGY: 50% long triggered at 1.0119, 50% entry waiting at 1.0184, against 1.0385, target TBD (below .9755)
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-04-08techs15.gif
As long as the AUDUSD rallies in 5 waves and declines in 3 waves, there is no reason to adopt a bearish outlook. The rally from .8512 is expected to exceed .9400 in the coming weeks. Objectives are near 1.00.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-07-08techs12.gif
Very near term, we are not too sure what is unfolding in the AUDUSD.We do think that the rally from .8512 to .9014 completed wave 1 in a larger 5 wave bullish cycle and that the decline from .9014 to .8817 completed wave 2 of that cycle.This count implies that wave 3 up is underway now and that the rally should accelerate.The rally has yet to do that, which calls into question our count.Still, as long as price is above .8817, we remain bulls.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-04-08techs17.gif
The drop on 1/22 to .7383 completed a large correction that had been underway since November. Like the AUDUSD, the NZDUSD trend remains up and an upside breakout will probably lead to a test of the July 2007 high at .8108.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-07-08techs14.gif
One can make the case that a larger decline is underway from .7966 because the decline from .7966 to .7781 is in 5 waves.This suggests that another 5 wave decline is underway now, towards at least .7742 (100% extension) and .7628 (161.8% extension).
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-04-08techs5.gif
We maintain that the decline from the November 2007 high at 1.4966 is the wave 3 top within a 5 wave advance from the June 2007 low at 1.3261. Since 1.4966, the EURUSD has either completed a flat as wave 4 or a triangle is still unfolding as wave 4. Either way, higher prices are expected in the coming weeks with objectives in the mid 1.50s. This could complete larger wave 3 within the 5 wave advance from the November 2005 low at 1.1638.
Visit our recently updated Euro Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-06-08techs3.gif
Wave E of the triangle is probably at its midpoint.Legs of triangles unfold in 3 waves.With 5 waves down from the wave D high, expect a rally in wave b of E to at least 1.4729 (38.2% of 1.4953-1.4591) before wave E ends closer to the mid 1.4400s.
Visit our recently updated Euro Currency Room for specific resources geared towards this currency.
STRATEGY: 50% Long triggered at 1.4595, risk is at 1.4509, target 1.4730 (the big opportunity comes on the drop to the mid 1.44s)
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-04-08techs7.gif
Longer term, we maintain that a 12 year triangle ended at 124.13 in June 2007 and that the USDJPY is headed lower for a test of its 1995 low at 81.12. Since 124.13, the USDJPY has traced out a series of 1st and 2nd waves. The decline should accelerate in the next month in wave 3 of 3. This forecast remains intact as long as price is below 114.65.
Visit our recently updated Yen Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-06-08techs5.gif
We maintain that the strong rally from 104.97 is a c wave that will complete a larger second wave as an expanded flat. Price is expected to exceed 107.92 and resistance should be strong in the 108.33/50 area. Look for a top and reversal near there. This count is intact as long a price is below 110.11.
Visit our recently updated Yen Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-04-08techs9.gif
For the first time in months, the GBPUSD daily count is clear. The pair has declined in 5 waves from 2.1160, indicating that a significant top is in place. The 5 wave decline is viewed as either wave 1 in a 5 wave bear cycle or wave A in a 3 wave bear cycle. In other words, longer term bearish potential is great. The rally underway now is either wave 2 or B and we will look for a top in the 2.0033-2.0463 zone. This corrective rally probably lasts for weeks if not most of this month.
Visit our recently updated British Pound Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-06-08techs7.gif
The rally from 1.9337 to 1.9957 is a 5 wave advance and is probably wave A within the A-B-C corrective rally.Wave B is underway now and is probably at its midpoint.The drop from 1.9957 is in 5 waves, therefore, expect a rally in wave b of B that challenges at least structural resistance at 1.9787 over the next few days before a decline in wave c of B completes wave B.
Visit our recently updated British Pound Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-04-08techs11.gif
A corrective 4th wave rally may be underway now within the 5 wave decline from the October 2006 high at 1.2768. The USDCHF will likely trade in a choppy manner for the next month or so, but with an upside bias before a decline in a 5th wave completes the entire decline from the October 2006 high and gives way to a multi-year low.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-06-08techs9.gif
A triangle could be in its early stages right now in the USDCHF. The decline from the 1/22 high at 1.1122 is in 3 waves and the rally from the 2/1 low at 1.0728 is also in 3 waves (to this point). Legs of triangles unfold in 3 waves so if a triangle is underway from the 1/22 high, then expect the next move to look something like what the arrows show on the chart above.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-04-08techs13.gif
The pattern in the USDCAD since the November low at .9055 is either an A-B-C rally that will lead to a new low (under .9055) or a 1-2 (expanded flat) base that will lead to a strong rally to new highs (suggesting that a multi-year USDCAD low is in place). Either way, price will come below .9755. Potential support from Fibonacci is at .9652 and .9511.
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-06-08techs11.gif
We wrote yesterday that “the short term picture is clear. The decline from 1.0378 is clearly a 5 wave decline and an a-b-c corrective rally is underway now towards 1.0117. The next level of resistance is Fibonacci resistance at 1.0184. Look for a top and reversal near these levels in order to position for a drop below .9755.”Look for a spike through 1.0102 that would complete the rally from .9871.Again, resistance is at 1.0124 and 1.0184.
Visit our recently updated Canadian Dollar Currency Room for specific resources geared towards this currency.
STRATEGY: Short in halves at 1.0119 and 1.0179, against 1.0385, target TBD (below .9755)
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-04-08techs15.gif
As long as the AUDUSD rallies in 5 waves and declines in 3 waves, there is no reason to adopt a bearish outlook. The rally from .8512 is expected to exceed .9400 in the coming weeks. Objectives are near 1.00.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-06-08techs13.gif
The decline from .9100 is in 5 waves and calls into question our favored count (shown in black) because 5 down from a high suggest that another 5 wave decline will occur.The AUDUSD count fits with the idea that the EURUSD and GBPUSD declines are at their midpoints.
STRATGY: Longs triggered at .8995 and .8935, against .8906, Target .90 (same scenario as the EURUSD, we are looking to get in after a larger setback)
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-04-08techs17.gif
The drop on 1/22 to .7383 completed a large correction that had been underway since November. Like the AUDUSD, the NZDUSD trend remains up and an upside breakout will probably lead to a test of the July 2007 high at .8108.
http://www.dailyfx.com/export/sites/dailyfx/story-images/2008/02/dailyfx_reports/Techs/02-06-08techs15n.gif
The same can be said about the NZDUSD that was said about the EURUSD, GBPUSD, and AUDUSD.That is, the decline from the top is in 5 waves therefore a deeper decline is expected. Fibonacci resistance is at .7896.
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