一个笨蛋的股指交易记录-------地狱级炒手

hefeiddd

Commentary:  With the decline from the top looking corrective (as opposed to impulsive), and with the a and c legs of the correction close to equal (218 and 199 pips), there is potential for a sizeable rally as long as price turns higher from close to current levels.  Although reward to risk favors longs here in the short term, we are wary of getting too aggressively bullish longer term due to the extreme sentiment (USD bearishness/Euro bullishness), as evidenced by the COT report.  The favored wave count does indicate one more high above 1.3680 in a 5th wave before an impulsive decline occurs.  We are willing to take a bullish stand against the swing low (1.3410) for an eventual retest of 1.3680.  Intraday bullish divergence with oscillators on the hourly favors a turn higher as well.          Strategy:  Bullish against 1.3410, targeting 1.3680





Commentary: We wrote Friday that, “in summary, we expect a new high (above 121.86) followed by a reversal.” The USDJPY pushed to 121.88 before slipping back.  There is no sign yet of a reversal but we expect a decline to at least the former 4th wave near 120.85 (as long as 121.88 holds).  Additional bearish potential is on a break below the potential support line drawn off of 117.60 and 119.46.  That line is near 120.72 currently and increases about 12 pips per day (see chart above).  Potential resistance is at the line drawn off of the 5/4 and 5/23 highs near 122.10 (increases about 18 pips per day). The entire rally from 115.14 may be a double zigzag correction.  
Strategy: None





Commentary:  Cable is little changed and our outlook is unchanged.  The turn higher from just below 1.9700 left two approximately equal legs from 2.0131 (2.0131-1.9841 = 290; 1.9997-1.9676 = 321).  Bulls were thwarted at the line drawn off the 5/1 and 5/9 highs but the 3 wave decline from 2.0131 is the dominant pattern and is bullish.  We mentioned yesterday that some consolidation should take place in a 4th wave, so the next move should be in a small 5th wave above 1.9892.  This will complete 5 waves up from 1.9676 and we would look to align with the uptrend on a corrective decline.  
Strategy:  Waiting for the scenario described above to play out for an opportunity to get bullish against 1.9676.  






Commentary:  The longer term outlook for higher prices is intact, although the USDCHF may endure a period of softness following the rejection at the 200 day SMA.  Potential support is at the confluence of the 61.8% of 1.2124-1.2230 / channel support near 1.2203.  Former resistance at 1.2221 could act as support also.  In fact, the decline from 1.2329 would equal the 1.2329-1.2239 decline at 1.2222.  This intersects with channel support early next week.  High reward/risk bullish opportunities come to the forefront at channel support.      
Strategy:  Establishing bullish position between 1.2200 and 1.2230, against 1.2124, targeting new highs (above 1.2329)






Commentary:  The USDCD is close to putting in an intermediate term low.  A measured objective for the end of this small degree 5th wave is at the 161.8% extension of 1.1168-1.0965/1.1061 at 1.0733.  Expectations are for a larger 4th wave to bring price back near 1.1000/1.1168.  Without concrete evidence of a low in place, and the fact that the upside is countertrend, we prefer to watch how the correction unfolds and look to get bearish for the eventual 5th wave decline to a new low.  The corrective move higher is likely to unfold as a flat or a triangle (since the 2nd wave was a sharp correction).  
Strategy: None






Commentary:  We maintain that a C wave decline is underway towards the 100% extension of .8390-.8168/.8349 at .8127.  Bears are in control as long as .8265 remains intact.  .8127 would be where wave C would equal wave A.  A break under .8168 would support our view.  The AUDUSD is testing support right now at the 55 day SMA (.8190).  
Strategy: Bearish against .8265 targeting .8127




Commentary:  We maintain that a C wave lower is unfolding from .7403.  Wave C would equal wave A at .7161.  .7314 is short term resistance but the bearish structure remains intact below as long as price is below .7403.  In the 5 wave rally from.6719 to .7491, the 5th wave is extended.  5th wave extensions are sometimes fully retraced so there is the possibility that Kiwi does not find solid support until .7082 (close to the 50% of .6719-.7491).  Kiwi is also testing its 55 day SMA (.7261).     
Strategy:  Bearish against .7403 targeting .7161 and .7082.

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hefeiddd

Commentary:  With the decline from the top looking corrective (as opposed to impulsive), and with the a and c legs of the correction close to equal (218 and 199 pips), there is potential for a sizeable rally as long as price turns higher from close to current levels.  Although reward to risk favors longs here in the short term, we are wary of getting too aggressively bullish longer term due to the extreme sentiment (USD bearishness/Euro bullishness), as evidenced by the COT report.  The favored wave count does favor one more high above 1.3680 in a 5th wave before an impulsive decline occurs.  We are willing to take a bullish stand against the swing low (right now 1.3410) if price trades to 1.3462 for an eventual retest of 1.3680.  Intraday bullish divergence with oscillators on the hourly favors a turn higher as well.         
Strategy:  Bullish above 1.3462, against swing low (1.3410 now), targeting 1.3680

Commentary: We asked yesterday  - is this the turn?  Well…apparently not.  The reversal from 120.85 gives scope to a new high in a 5th wave.  We warned yesterday that “very short term intraday charts fail to show impulsive downside action and the decline from 121.86 is corrective so far and in a-b-c format”, so this rally is not unexpected.  We would be confident in the bear side on a break below the potential support line drawn off of 117.60 and 119.46.  That line is near 120.62 currently and increases about 12 pips per day (see chart above).  Potential resistance is at the line drawn off of the 5/4 and 5/23 highs near 122.10 (increases about 18 pips per day).  In summary, we expect a new high (above 121.86) followed by a reversal.  Another scenario is that a more complex correction is unfolding from 121.86.  In this case, a c wave decline would come under 120.85 before an attempt at 121.86      
Strategy: None

Commentary:  Cable is little changed and our outlook is unchanged.  The turn higher from just below 1.9700 left two approximately equal legs from 2.0131 (2.0131-1.9841 = 290; 1.9997-1.9676 = 321).  Bulls were thwarted at the line drawn off the 5/1 and 5/9 highs but the 3 wave decline from 2.0131 is the dominant pattern and is bullish.  We mentioned yesterday that some consolidation should take place in a 4th wave, so the next move should be in a small 5th wave above 1.9892.  This will complete 5 waves up from 1.9676 and we would look to align with the uptrend on a corrective decline.  
Strategy:  Waiting for the scenario described above to play out for an opportunity to get bullish against

Commentary:  The longer term outlook for higher prices is intact, although the USDCHF may endure a period of softness following the rejection at the 200 day SMA.  Potential support is at the confluence of the 61.8% of 1.2124-1.2230 / channel support near 1.2203.  Former resistance at 1.2221 could act as support also.  In fact, the decline from 1.2329 would equal the 1.2329-1.2239 decline at 1.2222.  This intersects with channel support early next week.  High reward/risk bullish opportunities come to the forefront at channel support.      
Strategy:  Establishing bullish position between 1.2200 and 1.2230, against 1.2124, targeting new highs (above 1.2329)

Commentary:  There may be an intermediate term low (multi-week) at 1.0804 as it is possible to count 5 waves down from 1.1168.  1.0800 is also psychological support.  Expectations are for a larger 4th wave to bring price back to 1.1045-1.1194 (23.6%-38.2% of 1.1825-1.0804).  There are short term bullish opportunities against 1.0804 but without concrete evidence of a low in place, and the fact that the upside is countertrend, we prefer to watch how the correction unfolds and look to get bearish for the eventual 5th wave decline to a new low.  The corrective move higher is likely to unfold as a flat or a triangle (since the 2nd wave was a sharp correction), so short term range traders will likely see opportunities next week.  

Strategy: None


Commentary:  We maintain that a C wave decline is underway towards the 100% extension of .8390-.8168/.8349 at .8127.  Bears are in control as long as .8265 remains intact.  .8127 would be where wave C would equal wave A.  A break under .8168 would support our view.  The AUDUSD is testing support right now at the 55 day SMA (.8190).  
Strategy: Bearish against .8265 targeting .8127


Commentary:  We maintain that a C wave lower is unfolding from .7403.  Wave C would equal wave A at .7161.  .7314 is short term resistance but the bearish structure remains intact below as long as price is below .7403.  In the 5 wave rally from.6719 to .7491, the 5th wave is extended.  5th wave extensions are sometimes fully retraced so there is the possibility that Kiwi does not find solid support until .7082 (close to the 50% of .6719-.7491).  Kiwi is also testing its 55 day SMA (.7261).     
Strategy:  Bearish against .7403 targeting .7161 and .7082.

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hefeiddd

Commentary:  With the decline from the top looking corrective (as opposed to impulsive), and with the a and c legs of the correction close to equal (218 and 195 pips), there is potential for a sizeable rally as long as 1.3414 remains intact.  Although reward to risk favors longs here in the short term, we are wary of getting bullish longer term due to the extreme sentiment (USD bearishness/Euro bullishness), as evidenced by the COT report.  The favored wave count does favor one more high above 1.3680 in a 5th wave before an impulsive decline occurs.  We are willing to take a bullish stand against 1.3414 if price trades to 1.3462 (before dropping below 1.3414) for an eventual retest of 1.3680.         
Strategy:  Bullish above 1.3462, against 1.3414, targeting 1.3680

Commentary: Is this the turn?  The USDJPY has rolled over from just under 122.00 and declined below short term trendline support.  Still, very short term intraday charts fail to show impulsive downside action and the decline from 121.86 is corrective so far and in a-b-c format.  Risk is to the downside though as daily RSI has rolled over from above 70.  We would be confident in the bear side in a break below the potential support line drawn off of 117.60 and 119.46.  That line is near 120.50 currently and increases about 12 pips per day (see chart above).     
Strategy: None

Commentary:  Cable has turned up from just under 1.9700, leaving close to two equal legs from 2.0131 (2.0131-1.9841 = 290; 1.9997-1.9676 = 321).  Bulls were thwarted at the line drawn off the 5/1 and 5/9 highs but the 3 wave decline from 2.0131 is the dominant pattern and is bullish.  Allow for some consolidation in a small 4th wave and a small 5th wave to exceed 1.9892 before a more significant pullback.  This pullback will offer an opportunity to align with the next leg up.  
Strategy:  Waiting for the scenario described above to play out for an opportunity to get bullish against 1.9676.

Commentary:  The longer term outlook for higher prices is intact, although the USDCHF may endure a period of softness following the rejection at the 200 day SMA.  Potential support is at the confluence of the 61.8% of 1.2124-1.2230 / channel support near 1.2203.  Former resistance at 1.2221 could act as support also.  Watch the channel (shown below).  A break under the midpoint line of the channel would give short term bears an opportunity.  High reward/risk bullish opportunities come to the forefront at channel support.      
Strategy:  Waiting to get bullish against channel support (near 1.2200)



Commentary:  The 5th (from 1.1168) of the 3rd wave (from 1.1825) is in progress and our measured objective for its terminus is the 161.8% extension of 1.1168-1.0965/1.1061 at 1.0733.  The larger 4th wave will occur following completion of this large 3rd wave from 1.1825.  Oversold and divergent RSI (daily) supports our idea that a bottom is close.

Strategy: None

Commentary:  We maintain that a C wave decline is underway towards the 100% extension of .8390-.8168/.8349 at .8127.  Bears are in control as long as .8265 remains intact.  .8127 would be where wave C would equal wave A.  A break under .8168 would support our view.  Daily oscillators are bearish with RSI under 50 and the AUDUSD has slipped below the monthly (long term) bear break level of .8228 (see table on page 1).  
Strategy: Bearish against .8265 targeting .8127

Commentary:  Naturally, Kiwi is in the same position as the AUDUSD.  That is, a C wave lower appears to be unfolding from .7403.  Wave C would equal wave A at .7161.  .7314 is short term resistance but the bearish structure remains intact below as long as price is below .7403.  In the 5 wave rally from.6719 to .7491, the 5th wave is extended.  5th wave extensions are sometimes fully retraced so there is the possibility that Kiwi does not find solid support until .7082 (close to the 50% of .6719-.7491).     
Strategy:  Bearish against .7403 targeting .7161 and .7082.

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hefeiddd

USDJPY – The USDJPY continues one its one way train.  Bearish divergence as well as RSI rolling over from above 70 (240 minute chart) gives scope to price rolling over.  A break under the short term resistance line drawn off of the 5/11 and 5/18 lows near 121.36 is required to suggest that a turn lower has occurred.  We are sitting tight for now but watching the USDJPY closely for any signs of a reversal.   

GBPUSD – Cable has turned up from just under 1.9700, leaving close to two equal legs from 2.0131 (2.0131-1.9841 = 290; 1.9997-1.9676 = 321).  There is potential short term trendline resistance near 1.9875.  The most bullish outlook is intact as long as price remains above 1.9767.  The 3 wave decline from 2.0131 is the dominant pattern and is bullish.

USDCHF – The longer term outlook for higher prices is intact, although the USDCHF may endure a period of softness as the pair trades down near support from the confluence of the 61.8% of 1.2124-1.2230 / channel support near 1.2203.  Former resistance at 1.2221 could now be support as well.  Watch the channel (shown below).   


USDCAD – The 5th of the 3rd wave from 1.1168 may need to consolidate and then make one more low before the anticipated wave 4 bounce occurs.  The hourly chart shows that wave 3 (of 5 of 3) is extended and that a dip below 1.0825 would complete 5 down from 1.1061.  We should expect some consolidation under 1.0965 before yet another low before larger wave 4 occurs in a period of consolidation/pullback towards 1.1168.  A measured objective for the end of the decline is at the 161.8% extension of 1.1168-1.0965/1.1061 at 1.0733.


AUDUSD – We maintain that a C wave decline is underway towards the 100% extension of .8390-.8168/.8349 at .8127.  Bears are in control as long as .8256 remains intact.  .8127 would be where wave C would equal wave A (55 day SMA at .8149).  We are showing the EW count of wave C today.  The rally from .8180 is in 3 waves (so far), so it is reasonable to remain bearish.  If the rally traces out 5 waves, then we would need to reassess our position.  

NZDUSD – The bullish divergence at today’s low accompanied by a break of short trendline resistance points to higher price for the NZDUSD.  The next level to negotiate for bulls is the 5/21 high at .7316.  We’ll assess the bullish potential as the pattern plays out but we are bullish against .7244.  

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hefeiddd

EURUSD – No change from yesterday as price action is playing out as expected.  “As long as price is below 1.3531, our working assumption is that either a 3rd wave or a C wave is headed lower.  Short term measured objectives are at the 100% of 1.3680-1.3462/1.3609 at 1.3391 and the 161.8% extension at 1.3256.  Longer term, there is the possibility that a multi-month top is in at 1.3680 and that the EURUSD is headed much lower (towards 1.2500).  This week’s COT data favors the ‘larger top’.  For more on positioning, see http://www.dailyfx.com/story/charting_center/futures_positioning_cot_report/Euro_Longs_at_New_Record_1179756178128.html


USDJPY – The USDJPY is approaching resistance from the 2/22 high at 121.63, the 2/12 high at 122.08, and the 1/29 high at 122.17.  Daily RSI is overbought at above 70 – so we are weary of chasing this trend.  In the short term, the USDJPY is in the 5th wave position of a 5 wave rally that began at 119.46.  A push above 121.60 would complete the rally and lead to at least a correction, although it is out contention that a much more significant top will form.  The COT data shows that JPY shorts are getting stretched as well.  We are sitting tight for now but watching the USDJPY closely for any signs of a reversal.   


GBPUSD – Cable has found support just below 1.9700 but the bounce has been minimal so far.  Although the decline from the top (2.0131) is choppy, the series of lower highs keeps us looking lower.  Trendline resistance (shown below) comes in at 1.9760 and 1.9880, but price needs to remain below 1.9873 (former peak) in order to keep the short term trend pointed lower.  Daily lows from late March/early April are at 1.9545/89 (there is a trendline dating to June 2006 near there as well).  At this point, the pattern from 2.0131 appears to be playing out as a double zigzag – which points to lower levels.  Price has dropped under the 55 day SMA also (the 100 day is at 1.9661)

USDCHF – No change regarding the USDCHF as the bull trend remains intact.  “The impulsive action from 1.2124 may be the beginning of a 3rd wave advance.  Ultimately, we expect this rally to span weeks and target 1.2571.  A diagonal from 1.1993 may have kicked off the party and a measured objective for the end of wave 3 is not until 1.2493.  The pair is pushing against the 200 day SMA right now, which may offer some resistance.  The 3/9 high at 1.2354 is the next hurdle on the chart.  The bullish trend is strong as long as 1.2221 holds.”  

USDCAD – The 5th of the 3rd wave from 1.1168 may need to consolidate and then make one more low before the anticipated wave 4 bounce occurs.  The hourly chart shows that wave 3 (of 5 of 3) is extended and that a dip below 1.0825 would complete 5 down from 1.1061.  We should expect some consolidation under 1.0965 before yet another low before larger wave 4 occurs in a period of consolidation/pullback towards 1.1168.  A measured objective for the end of the decline is at the 161.8% extension of 1.1168-1.0965/1.1061 at 1.0733.

AUDUSD – We maintain that a C wave decline is underway towards the 100% extension of .8390-.8168/.8349 at .8127.  Bears are in control as long as .8256 remains intact.  .8127 would be where wave C would equal wave A (55 day SMA at .8149).  

NZDUSD – Kiwi is in the same position as the AUDUSD.  That is, a C wave lower appears to be unfolding from .7403.  We are bearish against .7403 and looking for a decline to where wave C would equal wave A at .7161.  Potential short term support may come in from the 55 day SMA at .7230.  The most aggressive count has the Kiwi breaking below .7264 while .7316 remains intact.  

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hefeiddd

EURUSD – As long as price is below 1.3531, our working assumption is that either a 3rd wave or a C wave is headed lower.  Short term measured objectives are at the 100% of 1.3680-1.3462/1.3609 at 1.3391 and the 161.8% extension at 1.3256.  Longer term, there is the possibility that a multi-month top is in at 1.3680 and that the EURUSD is headed much lower (towards 1.2500).  Potential support is near current price at the 55 day SMA (1.3433) and a daily close below there increases our confidence in the bearish outlook.  We are showing the longer term weekly chart today and our favored wave count – which has the EURUSD coming under 1.1638 by mid 2008.  Even an alternate count favors the EURUSD dropping to 1.2500.  Speculators positioning is plotted below (COT).

USDJPY – From Friday, “the C wave down that we have been looking for in the USDJPY may be under way.  The form of the decline on the way down will clue us in to the bearish potential.  A break below the support line drawn off of the 4/19 and 5/11 lows (just above 120.00) may lead to increased selling pressure.  A slight new high (above 121.38) is possible in order to complete a small degree 5th wave before a reversal.  The chart today points to the fact that the entire rally from 115.14 is corrective, while the preceding decline was impulsive.”  The new high has been registered and there are 5 waves up from 119.46 so at least a period of corrective decline is expected.  The USDJPY is approaching significant resistance from the 2/22 high at 121.63.

GBPUSD – Cable continues to break down as price is now below 1.9700.  We mentioned Friday that a” short term measured objective is at the 100% extension of 2.0131-1.9841/1.9997 at 1.9707 but we expect this decline to eventually challenge the 161.8% extension at 1.9528.”  Former daily lows from late March/early April are at 1.9545/89 (there is a trendline dating to June 2006 there as well).  At this point, the pattern from 2.0131 appears to be playing out as a double zigzag (which is what we suspected was playing out earlier in the week) – which points to lower levels.  Price has dropped under the 55 day SMA also (the 100 day is at 1.9661).         


USDCHF – As we have continued to suggest, “the impulsive action from 1.2124 may be the beginning of a 3rd wave advance.  Ultimately, we expect this rally to span weeks and target 1.2571.”  A diagonal from 1.1993 may have kicked off the party and a measured objective for the end of wave 3 is not until 1.2493.  The pair is pushing against the 200 day SMA right now, which may offer some resistance.  The 3/9 high at 1.2354 is the next hurdle on the chart.  The bullish trend is strong as long as 1.2221 holds.   


USDCAD – We maintain that a 5th wave decline (5th of the 3rd) is close to a bottom and that a period of consolidation/pullback will occur in a 4th wave back to 1.1168.  Daily momentum studies favor this view.  The pullback should prove corrective and give way to lower levels. Since the 2nd wave correction was sharp, expect the 4th wave correction to be a flat or triangle and top near 1.1168 (the wave 2 pullback lasted about a week so the 4th wave should last about a week as well).   


AUDUSD – We maintain that a C wave decline is underway towards the 100% extension of .8390-.8168/.8349 at .8127.  Bears are in control as long as .8256 remains intact.  .8127 would be where wave C would equal wave A (55 day SMA at .8149).  


NZDUSD – Kiwi is in the same position as the AUDUSD.  That is, a C wave lower appears to be unfolding from .7403.  We are bearish against .7403 and looking for a decline to where wave C would equal wave A at .7161.  Potential short term support may come in from the 55 day SMA at .7230.  The most aggressive count has the Kiwi breaking below .7264 while .7316 remains intact.  

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hefeiddd

EURUSD – Yesterday’s commentary noted that “the consolidation since is a 4th wave and a drop under 1.3504 would complete 5 waves down from 1.3609.  We will look for consolidation/bounce following a drop under 1.3609 in order to align with the downtrend.”  The EURUSD dropped under 1.3504 and the consolidation that we were looking for occurred in 3 waves back to 1.3512.  As long as price is below 1.3512, our working assumption is that either a 3rd wave or a C wave is headed lower.  Measured objectives are at the 100% of 1.3680-1.3462/1.3609 at 1.3391 and the 161.8% extension at 1.3256.

USDJPY – The C wave down that we have been looking for in the USDJPY may be under way.  The form of the decline on the way down will clue us in to the bearish potential.  A break below the support line drawn off of the 4/19 and 5/11 lows (just above 120.00) may lead to increased selling pressure.  A slight new high (above 121.38) is possible in order to complete a small degree 5th wave before a reversal.  The chart today points to the fact that the entire rally from 115.14 is corrective, while the preceding decline was impulsive.  Another impulsive decline should be underway now.   

GBPUSD – Cable continues to break down as price is testing the 1.9700 figure.  We mentioned yesterday that a” short term measured objective is at the 100% extension of 2.0131-1.9841/1.9997 at 1.9707 but we expect this decline to eventually challenge the 161.8% extension at 1.9528.”  Former daily lows from late March/early April are at 1.9545/89 (there is a trendline dating to June 2006 there as well).  At this point, the pattern from 2.0131 appears to be playing out as a double zigzag (which is what we suspected was playing out earlier in the week) – which points to lower levels.  Price has dropped under the 55 day SMA today (the 100 day is at 1.9660).   


USDCHF – A diagonal may have kicked off the USDCHF rally but a potential double top at 1.2281 urges caution.  The impulsive action from 1.2124 may be the beginning of a 3rd wave advance.  Ultimately, we expect this rally to span weeks and target 1.2571.  The pair closed above the 100 day SMA yesterday, which bolsters the bullish outlook.  A pullback towards Fibonacci support (38.2% - 61.8% of 1.2124-1.2281 at 1.2221/1.2184) may be needed in order to correct the 5 wave rally from 1.2124-1.2281 before the next leg higher takes place.     

USDCAD – We maintain that a 5th wave decline (5th of the 3rd) is close to a bottom and that a period of consolidation/pullback will occur in a 4th wave back to 1.1168.  Daily momentum studies favor this view.  The pullback should prove corrective and give way to a new low below 1.0927.  Since the 2nd wave correction was sharp, expect the 4th wave correction to be a flat or triangle.   


AUDUSD – We maintain that a C wave decline is underway towards the 100% extension of .8390-.8168/.8349 at .8127.  Near term resistance is at the 5/17 high of .8268 (along with the 21 day SMA at .8279).  .8127 would be where wave C would equal wave A (55 day SMA at .8149).  The next support level is at .8028 (3/26 low).


NZDUSD – Kiwi is in the same position as the AUDUSD.  That is, a C wave lower appears to be unfolding from .7403.  We are bearish against .7403 and looking for a decline to where wave C would equal wave A at .7161.  Potential short term support may come in from the 55 day SMA at .7219.  Very near term, an extended 3rd wave may have ended at .7264 and .7310/14 should prove formidable (if the pair gets there).  

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hefeiddd

EURUSD – We wrote yesterday that “we continue to look for the bigger turn due to the sentiment extreme (as evidenced by COT).  The rally from 1.3462 has stalled at the 61.8% of 1.3680-1.3462 at 1.3597 (the high is at 1.3609) and hourly RSI has rolled over from above 70, suggesting that we will see at least a pullback.  The long candle on the 240 minute chart (see below) also warns of additional bearish price action.”  The EURUSD turned lower and fell hard yesterday in a small 3rd wave.  The consolidation since is a 4th wave and a drop under 1.3504 would complete 5 waves down from 1.3609.  We will look for consolidation/bounce following a drop under 1.3609 in order to align with the downtrend.  Price is under the 20 SMA, which is rolling over and exhibits negative slope.      

USDJPY – We said yesterday that the USDJPY could chop higher towards trendline resistance at 121.00 and the pair has skyrocketed the last two days and currently trades just above the figure (121.00).  Trendline resistance should be strong here but getting short is risky business until there is some sign that the pair has turned.  Hourly RSI is at a momentum extreme (above 80), which makes it likely that any pullback will lead to a new high to create a divergence with the oscillator (rarely does a momentum extreme coincide with the actual high).  


GBPUSD – Cable is breaking down as price has broken under the 5/15 low of 1.9746.  A shirt term measured objective is at the 100% extension of 2.0131-1.9841/1.9997 at 1.9707 but we expect this decline to eventually challenge the 161.8% extension at 1.9528.  Former daily lows from late March/early April are at 1.9545/89 (there is a trendline dating to June 2006 there as well).  At this point, the pattern from 2.0131 appears to be playing out as a double zigzag (which is what we suspected was playing out earlier in the week) – which points to lower levels.     
   

USDCHF – “The longer term wave structure is bullish as the decline from 1.2571 is a double zigzag (inverse of the EURUSD rally).  A longer term inverse head and shoulders pattern (May 2006, December 2006, April 2007) is also visible.” Ultimately, we expect this rally to span weeks and target 1.2571.  Daily RSI and MACD have just crossed above there midpoints and price is close to challenging the 100 day SMA (the 20 day has turned up and the 50 day is trying to turn up now).  Short term channel resistance is at 1.2290 and increases about 6 pips per day.  Channel support is at 1.2140 (also increases about 6 pips per day).  


USDCAD – We wrote yesterday that “the decline from 1.1168 is either a B wave in an A-B-C correction that will end above 1.1168 or the 5th wave of the decline from 1.1825.  Either way, downside potential is limited.  In the former scenario, the rally begins from before 1.1005.  In the latter scenario, the pair will make a slight new low before reversing higher and tracing out a correction (which would be a 4th wave) of the decline from 1.1825.”  The ‘latter’ scenario is the one that occurred and there may be an intermediate term bottom in at 1.0965.  Look to align with the downtrend on a bounce towards 1.1168.   


AUDUSD – We maintain that a C wave decline is underway towards the 100% extension of .8390-.8168/.8349 at .8127.  Near term, there are 5 waves down from .8349 in what is wave 1 in what should prove to be a 5 wave bearish sequence (C wave will be 5 waves).  We are looking for a bounce in a second wave towards the former 4th at .8268 before the next leg down occurs.     

NZDUSD – We wrote yesterday that “with Kiwi unable to push through the 20 day SMA the last 3 days, it seems wise to adopt a neutral / cautious bearish stance against .7403 (a psychological figure as well at .7400).”  The short term structure is not nearly as clear as the short term structure for the AUDUSD but remaining below .7403 keeps the bearish bias strong.  .7343 is initial resistance and .7367 is the 61.8% of .7403-.7308.

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EURUSD – The EURUSD broke through the short term resistance line and closed above the 20 day SMA yesterday.  Support should be strong at the 5/14 high of 1.3558 but coming under here would be a sign that the bigger turn lower is underway.  We continue to look for the bigger turn due to the sentiment extreme (as evidenced by COT).  The rally from 1.3462 has stalled at the 61.8% of 1.3680-1.3462 at 1.3597 (the high is at 1.3609) and hourly RSI has rolled over from above 70, suggesting that we will see at least a pullback.  The long candle on the 240 minute chart (see below) also warns of additional bearish price action.  

USDJPY – The USDJPY continues to hold above the 10 and 20 day SMAs but the entire rally from 115.14 is suspect.  The rally is overlapping and thus corrective.  The pair could chop higher towards trendline resistance near 121.00.  Yesterday’s high is just below the 78.6% of 122.17-115.14 at 120.67, which is another potential reversal point.  The next big move is most likely a C wave decline below 115.14.  A break of the support line drawn off of the 3/5, 3/28, and 4/19 lows would signal that the C wave is underway.      

GBPUSD – Short term direction remains unclear, especially given the rally through 1.9826.  Daily studies remain bearish though as RSI is below 50 and price is below both the 10 and 20 day SMAs.  The 10 day has served as resistance today at 1.9863.  A candle similar to that of the EURUSD is visible on the 240 minute chart (long upper wick).  Coming under 1.9746 gives scope to a test of the 1.9545/89 area (former reaction low).  Potential resistance lines are from 1.9930 to 2.0000.

USDCHF – “The longer term wave structure is bullish as the decline from 1.2571 is a double zigzag (inverse of the EURUSD rally).  A longer term inverse head and shoulders pattern (May 2006, December 2006, April 2007) is also visible.” We have been waiting for a daily close above the resistance line drawn off of the 2/12 and 4/9 highs, which held last week, before getting aggressively bullish.  The USDCHF closed above the line last week, thus we are bullish against 1.1993.  Ultimately, we expect this rally to span weeks and target 1.2571.  The near term bullish case is strong above the short term trendline, which is near 1.2160.

USDCAD – We wrote yesterday that “the decline from 1.1168 is either a B wave in an A-B-C correction that will end above 1.1168 or the 5th wave of the decline from 1.1825.  Either way, downside potential is limited.  In the former scenario, the rally begins from before 1.1005.  In the latter scenario, the pair will make a slight new low before reversing higher and tracing out a correction (which would be a 4th wave) of the decline from 1.1825.”  The ‘latter’ scenario is the one that occurred and there may be a intermediate term bottom in at 1.0965.   

AUDUSD – With the AUDUSD failing (so far) at the 78.6% of .8390-.8168 and with the rally from .8168 failing to appear impulsive, it is possible that a larger correction is playing out.  As long as price remains below .8349, our favored view is that a C wave decline is underway towards the 100% extension of .8390-.8168/.8349 at .8127.  


NZDUSD – With Kiwi unable to push through the 20 day SMA the last 3 days, it seems wise to adopt a neutral / cautious bearish stance against .7403 (a psychological figure as well at .7400).  Keep risk tight on a decline below .7345 as that could mark the end of an A-B-C correction and lead to another leg higher.

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EURUSD – The EURUSD nearly tagged the short term resistance line this morning (drawn off of the 5/1 and 5/7 highs) on the spike through 1.3550.  We wrote yesterday about the alternate count that has a correction ending at 1.3462.  However, with sentiment still extreme (http://www.dailyfx.com/story/charting_center/futures_positioning_cot_report/British_Pound_Trend_Change_as_1179156202957.html) we favor lower prices.  The aforementioned trendline resistance along with the 10 and 20 day SMA (1.3555 and 1.3582) also favor bears.  In fact, the 20 day SMA has changed from positive to negative slope.  The last positive to negative slope change occurred in late December, just before the EURUSD fell to 1.2865.  We are bearish against the trendline, which comes in near 1.3560 (today’s high).   


USDJPY – The USDJPY continues to hold above the 10 and 20 day SMAs but the entire rally from 115.14 is suspect.  The rally is overlapping and thus corrective.  The pair could chop higher towards trendline resistance near 121.00.  Today’s high is just below the 78.6% of 122.17-115.14 at 120.67, which is another potential reversal point.  The next big move is most likely a C wave decline below 115.14.  A break of the support line drawn off of the 3/5, 3/28, and 4/19 lows would signal that the C wave is underway.         

GBPUSD – While the short term count is unclear, it is clear that the declines are impulsive and the rallies corrective.  A bearish stance is warranted as long as price remains below 1.9826.  The break below 1.9759 this morning clears the way for a fall to support from late March/early April at 1.9545/89.  1.9528 is the 161.8% extension of 2.0131-1.9841/1.9997.  The 100% extension at 1.9707 is potential short term support.  If a double zigzag is forming from the 2.0131 high, then wave Y should extend towards the 1.9545/89 congestion area.  

USDCHF – “The longer term wave structure is bullish as the decline from 1.2571 is a double zigzag (inverse of the EURUSD rally).  A longer term inverse head and shoulders pattern (May 2006, December 2006, April 2007) is also visible.” We have been waiting for a daily close above the resistance line drawn off of the 2/12 and 4/9 highs, which held last week, before getting aggressively bullish.  The USDCHF closed above the line last week, thus we are bullish against 1.1993.  Ultimately, we expect this rally to span weeks and target 1.2571.  The near term bullish case is strong above the short term trendline, which is near 1.2160.

USDCAD – The decline from 1.1168 is either a B wave in an A-B-C correction that will end above 1.1168 or the 5th wave of the decline from 1.1825.  Either way, downside potential is limited.  In the former scenario, the rally begins from before 1.1005.  In the latter scenario, the pair will make a slight new low before reversing higher and tracing out a correction (which would be a 4th wave) of the decline from 1.1825.  We are showing the latter count (5th wave preferred) on the chart below.

AUDUSD – With the AUDUSD failing (so far) at the 78.6% of .8390-.8168 and with the rally from .8168 failing to appear impulsive, it is possible that a larger correction is playing out.  As long as price remains below .8349, our favored view is that a C wave decline is underway towards the 100% extension of .8390-.8168/.8349 at .8127.   

NZDUSD – We wrote Thursday that “Kiwi has been the quietest pair in the last few weeks as the decline from the top (.7491) takes on the shape of a wedge, which is a bullish pattern.  A break through the top of the wedge near .7370 would signal that price is likely headed for a re-test of .7491.”  The rally from .7249 is clearly impulsive the setback from .7399 is corrective.  Favor the upside and a test of .7491 as long as .7249 remains intact.  Potential Fibonacci support is between .7342 and .7306.

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EURUSD – We wrote Thursday that “we must consider alternatives to the more bearish scenario that we have favor.  One of these alternatives is that an A-B-C correction ended at 1.3514 (see chart below).  A drop below 1.3514 encounters 1.3480, which is where the A and C legs would be equal (and this would possible be the end of the A-B-C).  If this is the case, then the EURUSD would register one more high (above 1.3680) before the big turn.”  With the pair turning higher from not far below 1.3480 (1.3462), bears remain on the defensive.  A potential resisting trendline is at 1.3570 and the 20 day SMA is at 1.3584.  Near term, a drop back to former 4th wave support at 1.3523 seems likely.   

USDJPY – The USDJPY continues to hold above the 10 and 20 day SMAs but the structure of the rally from 120.00 is suspect.  The rally is choppy and bulls face the risk of a pullback towards trendline support near 119.00.  Coming under this line increases the bearish potential.  The 78.6% of 122.17-115.14 at 120.67 is resistance.  The head and shoulders on the daily warns of a reversal.  

GBPUSD – The 5 wave decline from 1.9997 suggests that the trend has turned down.  The rally from 1.9759 has also proved corrective, unfolding in 3 waves.  The rally from 1.9759 may only be the first of 3 corrective waves though.  Resistance on a rally through 1.9843 is at the 61.8% of 1.9997-1.9759 at 1.9906.  Look to align with the downtrend on a bounce as the next leg down could be a 3rd wave decline.  Coming under 1.9759 signals that the next leg lower is underway.     

USDCHF – “The longer term wave structure is bullish as the decline from 1.2571 is a double zigzag (inverse of the EURUSD rally).  A longer term inverse head and shoulders pattern (May 2006, December 2006, April 2007) is also visible.” We have been waiting for a daily close above the resistance line drawn off of the 2/12 and 4/9 highs, which held last week, before getting aggressively bullish.  The USDCHF closed above the line last week, thus we are bullish against 1.1993.  Ultimately, we expect this rally to span weeks (maybe months) and target 1.2571.

USDCAD – After bouncing from just ahead of 1.1000, the USDCAD rallied to the 20 day SMA but was rejected there Friday.  Still, “1.1000 is the 261.8% extension of wave 1 (1.1879-1.1562).  With a measured objective at 1.1000, deeply oversold daily RSI, and ATR declining (from 79 to 72) since 4/30, it is likely that the USDCAD has put in an intermediate term low at 1.1005.  A 4th wave correction will bring the USDCAD up to Fibonacci resistance between 1.1199-1.1318 before a 5th wave completes the bearish pattern below 1.0927.”  The decline from 1.1168 is most likely just the B wave of an A-B-C correction.  One more rally leg should unfold before the USDCAD completes the longer term 5th wave under 1.0927.

AUDUSD – With the AUDUSD failing (so far) at the 78.6% of .8390-.8168 and with the rally from .8168 failing to appear impulsive, it is possible that a larger correction is playing out.  As long as price remains below .8349, our favored view is that a C wave decline is underway towards the 100% extension of .8390-.8168/.8349 at .8127.  

NZDUSD – We wrote Thursday that “Kiwi has been the quietest pair in the last few weeks as the decline from the top (.7491) takes on the shape of a wedge, which is a bullish pattern.  A break through the top of the wedge near .7370 would signal that price is likely headed for a re-test of .7491.”  The rally from .7249 is clearly impulsive and initial support is at .7361.  Continue to look higher as setbacks should prove corrective.  

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EURUSD – Having reached our initial target of 1.3480 the EURUSD  continues to consolidate at lower levels. True support does not come into play until fully 100 points lower  at 1.3350 but a bounce back to initial support  of 1.3550 ( now resistance) is not out ofteh question.
USDJPY – A big flare out shooting star on the daily chart suggests that  the USDJPY may have hit a near term peak . Downside targets reach all the way to 117.50 before any meaningful support appears, but a break of the 120.50 high invalidates the reversal scenario and outs bulls back in control

GBPUSD – Yesterday we wrote,  “That pattern could very well be a B wave within a larger A-B-C decline from 2.0131.  If this is the case, then Cable is likely to slip to the 100% extension of 2.0131-1.9841/1.9997 at 1.9709 before mounting any significant rally attempt.”  With the pair printing a very ugly red candle that definitely broke support at 1.9860 level the bias is clearly bearish.  Still a bounce here back to that level is quite possible.

USDCHF – Although the technical structure of USDCHF remains bullish, the doji-like congestion over the past few days suggests hesitation. The 4/09/07 swing high of 1.2289 remains key to the bullish case and only an incontrovertible break of that level confirms further upside potential to 1.2500.

USDCAD – Has CAD made a double bottom at the 1.1000 level? V shaped bounces are rare, so the currency pair could easily retest the level once again, but 1.1000 now becomes strong support and the near term bias appears to be up. A break of that level to the downside however, will cause massive technical damage and could take pair all the way to 1.07000 before stabilizing.

AUDUSD – Aussie continues to display a bullish posture as the pair once again targets highs at the 8390 level. Today’s lows at 8222 represent  risk to the downside which if broken could invalidate the upward bias turning the whole formation into a lower double top which would ultimately present very bearish implications  

NZDUSD – Kiwi has appears to be in a slow motion wreck as the pair fails at the .7500 level and is in the process of carving out a massive top. Immediate support at 7250 and then 7200 but more substantive support does not exist until 7100 presenting further opportunity to NZDUSD shorts.

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EURUSD – The EURUSD failed to fall below 1.3514 and left a truncated 5th wave (refers to a 5th wave that fails to fall below the preceding 3rd wave of the same degree.  We must consider alternatives to the more bearish scenario that we have favor.  One of these alternatives is that an A-B-C correction ended at 1.3514 (see chart below).  A drop below 1.3514 encounters 1.3480 , which is where the A and C legs would be equal (and this would possible be the end of the A-B-C).  If this is the case, then the EURUSD would register one more high (above 1.3680) before the big turn.  Still, price remains below the confluence of the 10/20 day SMAs, which is resistance at 1.3585/86.

USDJPY – The USDJPY has held above the 20 day SMA (and the 10 day on a daily closing basis).  Long lower daily wicks indicate strong buying interest at 119.50.  The next level of resistance is the 5/4 high at 120.46 and a rally through there exposes the resistance line drawn off of the 3/12 and 4/16 highs near 121.00.  There is likely an abundance of offers near that line.  119.52 is critical support.

GBPUSD – The dominant pattern is the 3 wave rally from 1.9841 to 1.9997.  This is a bearish pattern but today’s high at 1.9961 must hold in order for bears to remain in control.  That pattern could very well be a B wave within a larger A-B-C decline from 2.0131.  If this is the case, then Cable is likely to slip to the 100% extension of 2.0131-1.9841/1.9997 at 1.9709 before mounting any significant rally attempt.  Again, 1.9961 is key.  Moving averages favor the downside as the 10 day has crossed below the 20 day and the pair closed below the 20 day SMA yesterday.

USDCHF – “The longer term wave structure is bullish as the decline from 1.2571 is a double zigzag (inverse of the EURUSD rally).  A longer term inverse head and shoulders pattern (May 2006, December 2006, April 2007) is also visible.” We have been waiting for a daily close above the resistance line drawn off of the 2/12 and 4/9 highs, which held last week, before getting aggressively bullish.  The USDCHF closed above the line two days ago and has held there, thus we are bullish against 1.1993.  Ultimately, we expect this rally to span weeks (maybe months) and target 1.2571.   

USDCAD – After bouncing from just ahead of 1.1000, the USDCAD has rallied to the 10 day SMA.  1.1000 is the 261.8% extension of wave 1 (1.1879-1.1562).  With a measured objective at 1.1000, deeply oversold daily RSI, and ATR declining (from 79 to 72) since 4/30, it is likely that the USDCAD has put in an intermediate term low at 1.1005.  A 4th wave correction will bring the USDCAD up to Fibonacci resistance between 1.1199-1.1318 before a 5th wave completes the bearish pattern below 1.0927.



AUDUSD – We wrote yesterday that “a look at the daily gives perspective.  It looks as if the 3rd wave that began at .7415 is extended thus one more high above .8390 would complete the larger 3rd wave and give way to a larger 4th correction.  The longer term bias is bullish above .8168.”  The near term structure is bullish as well as the AUDUSD has rallied through a short term resistance line.


NZDUSD – Kiwi has been the quietest pair in the last few weeks as the decline from the top (.7491) takes on the shape of a wedge, which is a bullish pattern.  A break through the top of the wedge near .7370 would signal that price is likely headed for a re-test of .7491.  However, daily studies are bearish as evidenced by downward sloping oscillators and a recent bearish 10/20 day SMA cross.

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EURUSD – We were correct in labeling the decline from 1.3619 a 3rd wave down.  A 4th correction is occurring now and will draw price under 1.3514 in a small 5th wave.  The question is whether or not the 4th wave is complete at 1.3551.  A more complex correction is possible (such as a triangle or a flat).  The correction is unlikely to push above former congestion at 1.3564 and 1.3593 needs to hold in order to keep the bearish structure intact.  Price closed under the 20 day SMA yesterday and the short term head and shoulders pattern is complete.  Bearish targets going forward are the 100% extension of 1.3680-1.3533/1.3628 at 1.3480 and the 161.8% extension at 1.3389.

USDJPY – The USDJPY has held above the 20 day SMA (and the 10 day on a daily closing basis).  Long lower daily wicks indicate strong buying interest at 119.50 and the outlook for a stronger dollar favors the upside.  However, the rally from 119.52 is a 3 wave correction so far and MACD slope is negative, which is bearish.  Technical signals are conflicting right now, telling us that there are better opportunities elsewhere.  Still, coming under 119.52 sets the stage for an attack on the 100% extension of 120.46-119.52/120.08 at 119.14 (the possible A-B-C correction labeling is shown below).

GBPUSD – The rally from 1.9841-1.9974 is impulsive and the decline from 1.9974-1.9877 is corrective.  This indicates that Cable is headed higher (as long as 1.9877 holds).  Potential resistance is at the 100% extension of 1.9841-1.9974/1.9877 at 2.0010.  Trendline resistance drawn off of 2.0131 and 2.0071 reinforces resistance near there.  A break above the line exposes the 161.8% extension at 2.0092.     

USDCHF – “The longer term wave structure is bullish as the decline from 1.2571 is a double zigzag (inverse of the EURUSD rally).  A longer term inverse head and shoulders pattern (May 2006, December 2006, April 2007) is also visible.” We have been waiting for a daily close above the resistance line drawn off of the 2/12 and 4/9 highs, which held last week, before getting aggressively bullish.  The USDCHF closed above the line yesterday, thus we are bullish against 1.1993.  Ultimately, we expect this rally to span weeks (maybe months) and target 1.2571  The 10 day SMA crosses above the 20 day SMA yesterday as well.      

USDCAD – After bouncing from just ahead of 1.1000, the USDCAD has rallied just shy of the 10 day SMA.  1.1000 is the 261.8% extension of wave 1 (1.1879-1.1562).  With a measured objective at 1.1000, deeply oversold daily RSI, and ATR declining (from 79 to 72) since 4/30, it is likely that the USDCAD has put in an intermediate term low at 1.1005.  A 4th wave correction will bring the USDCAD up to Fibonacci resistance near 1.1199-1.1318 before a 5th wave completes the bearish pattern below 1.0927.

AUDUSD – As long as .8242 holds, the AUDUSD structure is bullish short term.  Rallying through the resistance line drawn off of .8390 and .8357 would bolster the outlook for a new high in wave 5 above .8390.  A look at the daily gives perspective.  It looks as if the 3rd wave that began at .7415 is extended thus one more high above .8390 would complete the larger 3rd wave and give way to a larger 4th correction.  The longer term bias is bullish above .8168.   

NZDUSD – The decline from the top (.7491) takes on the shape of a wedge and is bullish.  A break through the top of the wedge near .7400 would signal that price is likely headed for a re-test of .7491.  Friday’s candle is a hammer (bullish reversal) and supports this outlook.  Last week’s low needs to hold (.7330) for bulls to remain in control.  

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EURUSD – The subdivisions of the decline from 1.3627 exhibit impulsive characteristics and could be the beginning of a 3rd wave down (or C wave).  The bearish structure is intact with price below 1.3619 and potential short term support is at the 100% extension of 1.3680-1.3533/1.3627 at 1.3480 and the 161.8% extension at 1.3389.  A turn higher from 1.3480 would leave to equal legs from 1.3680, which would possible lead to a new high.  If the decline stretches to 1.3389, then probability is high that a multi-week (maybe multi-month) top is in place at 1.3680.  Trendline support drawn off of the 3/9 and 4/9 lows is giving way and price is now below the 20 day SMA (1.3580).  The short term pattern is also a head and shoulders reversal and would be completed on a break below 1.3533.   
  
USDJPY – The USDJPY continues to hold above support (former resistance) from the 4/16 high at 119.84.  As mentioned yesterday “a support line from the 4/25 and 5/1 lows keeps us looking higher for now.  A break of this support line would be bearish and give scope to additional erosion to the 119.00 figure (5/1 low at 119.07).”   
   
GBPUSD – The rally from 1.9841-1.9974 is impulsive and the decline that has followed is corrective.  This indicates that Cable is headed higher (as long as 1.9841 holds).  Resistance is near the intersection of the former 2 month supporting trendline and line drawn off of the 4/18 and 5/1 highs.  This line is near the 100% extension of 1.9841-1.9974/1.9913 at 2.0046.  Given the implications of US Dollar COT positioning (discussed yesterday at http://www.dailyfx.com/story/charting_center/futures_positioning_cot_report/US_Dollar_Bought_Heavily_by_1178550088587.html) selling the buck at this point seems a risky proposition.  GBP strength is likely better played against the euro.

USDCHF – “The longer term wave structure is bullish as the decline from 1.2571 is a double zigzag (inverse of the EURUSD rally).  A longer term inverse head and shoulders pattern (May 2006, December 2006, April 2007) is also visible.” We have been waiting for a daily close above the resistance line drawn off of the 2/12 and 4/9 highs, which held last week, before getting aggressively bullish.  Today might be that day.  The intraday price action is bullish with a corrective decline from 1.2187 giving way to an impulsive looking rally.  
   
USDCAD – We mentioned yesterday that the “the USDCAD may launch an assault on the 1.1000 figure before a corrective rally unfolds.”  This has happened this morning with the pair falling to 1.1005.  1.1000 is also the 261.8% extension of wave 1 (1.1879-1.1562).”  With a measured objective at 1.1000, deeply oversold daily RSI, and ATR declining (from 79 to 72) since 4/30, it is likely that the USDCAD is getting close to an intermediate term low.  A 4th wave correction will bring the USDCAD up to Fibonacci resistance near 1.1199-1.1318 before a 5th wave completes the bearish pattern below 1.0927.

AUDUSD – We wrote yesterday that “the decline from the top is in a corrective 3 waves – thus we are suspending our bearish forecast.  The pair has pushed through the midpoint of the short term channel (see chart below), which gives scope to a test of channel resistance near .8300 (more bullish potential exists on a break above .8300).”  The AUDUSD has been turned back from the .8300 figure but the structure remains bullish above .8242.        

NZDUSD – The decline from the top (.7491) takes on the shape of a wedge and is bullish.  A break through the top of the wedge near .7400 would signal that price is likely headed for a re-test of .7491.  Friday’s candle is a hammer (bullish reversal) and supports this outlook.  Last week’s low needs to hold (.7330) for bulls to remain in control.  

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EURUSD – The EURUSD decline last week was the first weekly decline since the week that ended 3/23.  The larger turn scenario that we have been looking for remains preferred as long as the pair is unable to sustain a break above Friday’s high at 1.3622 (reinforced by the 61.8% of 1.3680-1.3533 at 1.3624).  A rally above 1.3624 leaves the EURUSD susceptible to a new high in a small 5th wave.  A daily close below the 20 day SMA (1.3573 today) would be a strong sign that a multi-week top is in place.   

USDJPY – The USDJPY slipped to former resistance (now support) from the 4/30 high at 119.75 this morning.   A support line from the 4/25 and 5/1 lows keeps us looking higher for now.  A break of this support line would be bearish and give scope to additional erosion to the 119.00 figure (5/1 low at 119.07).  

GBPUSD – The break of 2 month trendline support is bearish but Cable could rally to test the line as resistance near the 2.000 figure before more bearish potential comes to the forefront.  Disconcerting to bulls is that the decline from the top (2.0131) is in just 3 waves, which is corrective. Still, daily MACD remains bearish (MACD below signal line) and the last two days have closed below the 20 day SMA.  Wave structure and other technical indicators are conflicting so it may be wise to look for opportunities elsewhere.

USDCHF – “The longer term wave structure is bullish as the decline from 1.2571 is a double zigzag (inverse of the EURUSD rally).  A longer term inverse head and shoulders pattern (May 2006, December 2006, April 2007) is also visible.” Still, a break above the trendline drawn off of the 2/12 and 4/9 highs is required to clear the way for higher prices.  

USDCAD – The USDCAD may launch an assault on the 1.1000 figure before a corrective rally unfolds.  “There is little doubt that the decline from 1.1825 is a 3rd wave.  Therefore, any rally should be treated like a correction as a 5th wave decline will eventually take the USDCAD to lower levels.  Initial resistance is the 4/24 high at 1.1246.  With RSI putting in a momentum extreme on 4/25 at 19.91 (daily), downside potential looks limited as the next few weeks may be dominated by sideways/corrective trading in order to correct the oversold condition (daily).  The next support level is the 9/01/2006 low at 1.1028 followed by the 261.8% extension of wave 1 (1.1879-1.1562) – at 1.1000.”  

AUDUSD – This morning’s price action is very bullish following the decline from the top is in a corrective 3 waves – thus we are suspending our bearish forecast.  The pair has pushed through the midpoint of the short term channel (see chart below), which gives scope to a test of channel resistance near .8300 (more bullish potential exists on a break above .8300).  Short term support should be strong at a reaction high from Friday at .8222.      

NZDUSD – The decline from the top (.7491) takes on the shape of a wedge and is bullish.  A break through the top of the wedge near .7400 would signal that price is likely headed for a re-test of .7491.  Friday’s candle is a hammer (bullish reversal) and supports this outlook.  Last week’s low needs to hold (.7330) for bulls to remain in control.

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EURUSD – The decline (although brief) below last week’s low at 1.3541 is additional evidence that at least a temporary top is in place.  A weekly close below 1.3541 would be more convincing (and the 20 day SMA is at 1.3559…which is giving way).  Even if the decline from the top is just a correction, it is likely that the decline extends to the 100% extension of 1.3677-1.3559 / 1.3622 at 1.3504.  A break below there exposes the 161.8% extension at 1.3431.  1.3622 is resistance and needs to remain intact in order to keep the bearish structure intact.      
        
USDJPY – The USDJPY has chopped higher in quiet trading.   Resistance is at the 78.6% of 122.17-115.14 at 120.67.  A potential resistance line drawn off of the 3/12 and 4/16 highs is near 120.60 as well.  Bigger picture, the entire rally from 115.14 takes on a wedge shape, which is a bearish pattern.  We are looking for the USDJPY to chop higher to 120.50/67 – after which reward/risk will favor shorts.  

GBPUSD – Cable has come under trendline support and is hovering near last week’s low (1.9864). The 100% extension of 2.0131-1.9864 / 2.0071 at 1.9804 is a measured objective following a break under 1.9864.  A decline much below there targets the 161.8% extension at 1.9639. A decline to 1.9804 or 1.9639 could be the C wave in an A-B-C decline from the top.  Yesterday’s high at 1.9945 is rewsistnce.  The pair closed below the 20 day SMA yesterday, which bolsters the bearish outlook.     

USDCHF – As mentioned yesterday, “the longer term wave structure is bullish as the decline from 1.2571 is a double zigzag (inverse of the EURUSD rally).  A longer term inverse head and shoulders pattern (May 2006, December 2006, April 2007) is also visible.” Still, a break above the trendline drawn off of the 2/12 and 4/9 highs is required to clear the way for higher prices.  The USDCHF is pressing against this trendline again this morning and looks poised to break higher.  Rallying through 1.2187 (5/2 high) would be a bullish signal.            

USDCAD – The USDCAD is unchanged from yesterday.  “There is little doubt that the decline from 1.1825 is a 3rd wave.  Therefore, any rally should be treated like a correction as a 5th wave decline will eventually take the USDCAD to lower levels.  Initial resistance is the 4/24 high at 1.1246.  With RSI putting in a momentum extreme on 4/25 at 19.91 (daily), downside potential looks limited as the next few weeks may be dominated by sideways/corrective trading in order to correct the oversold condition (daily).  The next support level is the 9/01/2006 low at 1.1028 followed by the 261.8% extension of wave 1 (1.1879-1.1562) – at 1.1000.”  

AUDUSD – The AUDUSD has come under the 20 day SMA and broken below last week’s low (as well as the .8200 figure) and a bearish 10/20 day SMA cross is taking place today.  Former support from the 5/2 low at .8218 is now resistance.  The next potential support level is the 38.2% of .7678-.8390 at .8118.  .8103 is the 161.8% extension of .8390-.8233 / .8357.   

NZDUSD – We have remained bearish and rightly so as the Kiwi has also broken below the confluence of its weekly low / 20 day SMA.  There is potential support from the 100% extension of .7484-.7348 / .7445 at .7309 (a level reinforced by the 4/10 high at .7413).  Short term resistance is at .7398 and the bearish case is strong below there.      

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EURUSD – We are still looking for price to come under last week’s low at 1.3541 to more strongly signal that a top is in place.  This level is reinforced by 2 month trendline that is just above 1.3550 (20 day SMA is also at 1.3553).  Oscillators on the daily are bearish as RSI has rolled over from above 70 and a bearish MACD crossover occurred Tuesday.  Near term, it is possible to count a 5 wave decline from 1.3677 and the rally from 1.3559 looks corrective and may be playing out as a double zigzag.  In this case, we would see one more small down-up scenario before a bigger decline takes place.  The next level of short term resistance is the 61.8% at 1.3632.            

USDJPY – The USDJPY has chopped lower from yesterday’s high at 120.28 in quiet trading.   Resistance is at the 78.6% of 122.17-115.14 at 120.67.  A potential resistance line drawn off of the 3/12 and 4/16 highs is near 120.50.  Bigger picture, the entire rally from 115.14 takes on a wedge shape, which is a bearish pattern.  We are looking for the USDJPY to chop higher to 120.50/67 – after which reward/risk will favor shorts.  

GBPUSD – Cable has come under trendline support but the short term double bottom at 1.9864/66 keeps shorts on the defensive at the moment. The 100% extension of 2.0131-1.9864 / 2.0071 at 1.9804 is a measured objective following a break under 1.9864.  A decline much below there targets the 161.8% extension at 1.9639. A decline to 1.9804 or 1.9639 could be the C wave in an A-B-C decline from the top.  An intraday reaction high at 1.9968 is initial resistance.     

USDCHF – As mentioned yesterday, “the longer term wave structure is bullish as the decline from 1.2571 is a double zigzag (inverse of the EURUSD rally).  A longer term inverse head and shoulders pattern (May 2006, December 2006, April 2007) is also visible.” Still, a break above the trendline drawn off of the 2/12 and 4/9 highs is required to clear the way for higher prices.  The USDCHF has reversed off of this trendline, sending the USDCHF back below 10 and 20 day SMAs – making longs a daunting proposition.            

USDCAD – The USDCAD is unchanged from yesterday.  “There is little doubt that the decline from 1.1825 is a 3rd wave.  Therefore, any rally should be treated like a correction as a 5th wave decline will eventually take the USDCAD to lower levels.  Initial resistance is the 4/24 high at 1.1246.  With RSI putting in a momentum extreme on 4/25 at 19.91 (daily), downside potential looks limited as the next few weeks may be dominated by sideways/corrective trading in order to correct the oversold condition (daily).  The next support level is the 9/01/2006 low at 1.1028 followed by the 261.8% extension of wave 1 (1.1879-1.1562) – at 1.1000.”  

AUDUSD – The AUDUSD has come under the 20 day SMA and briefly traded below .8233 (last week’s low) yesterday.  Weekly RSI is divergent and above 70 for the first time since November 2004.  The rally from .7678 is an extended 5th wave, which are often fully retraced.  Near term resistance is at the 10/20 day SMA confluence at .8290/93 and bearish potential is strong below there.  We are showing the weekly chart this morning as it illustrates the longer term turn possibility.

NZDUSD – The resistance from the yearly trendline and the bearish MACD crossover (daily) along with daily RSI declining from above 70 suggest that we look lower but a break below .7348 is required before we can get aggressively bearish against .7491.  Former resistance at .7313 is now potential support.  Short term resistance is at the 5/1 high of .7445.           
         

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EURUSD – The turn lower from channel resistance has sent the EURUSD below the first support shelf at 1.3582 but coming under last week’s low at 1.3541 would more strongly signal that a top is in place.  This level is reinforced by 2 month trendline support near 1.3550.  Oscillators on the daily are bearish as RSI has rolled over from above 70 and a bearish MACD crossover occurred yesterday.  Near term resistance is at the 38.2% of the decline from 1.3677 to 1.3559 at 1.3604 (the 61.8% is at 1.3632).  A break below trendline support warrants a bearish stance against 1.3677.  
         
USDJPY – The USDJPY looks top heavy at current levels as evidenced by RSI bearish divergence on the hourly.  Still, the resistance is not until the 78.6% of 122.17-115.14 at 120.67.  With the rally from 117.60 in 5 waves, a correction is due towards the former 4th wave, which intersects with Fibonacci support at the 38.2% and 50% of 117.60-120.23 at 118.91/119.22.     

GBPUSD – Cable is breaking below trendline support and coming under 1.9864 would expose the 100% extension of 2.0131-1.9864 / 2.0071 at 1.9804.  A decline much below there targets the 161.8% extension at 1.9639. Similar to the EURUSD, daily oscillators are bearish (MACD crossover and declining RSI).  An intraday reaction high at 1.9968 is initial resistance.   

USDCHF – As mentioned yesterday, “the longer term wave structure is bullish as the decline from 1.2571 is a double zigzag (inverse of the EURUSD rally).  A longer term inverse head and shoulders pattern (May 2006, December 2006, April 2007) is also visible.” Still, a break above the trendline drawn off of the 2/12 and 4/9 highs is required to clear the way for higher prices.  
         
USDCAD – Yesterday’s candle ( hammer) may be the beginning of a much needed correction.  “There is little doubt that the decline from 1.1825 is a 3rd wave.  Therefore, any rally should be treated like a correction as a 5th wave decline will eventually take the USDCAD to lower levels.  Initial resistance is the 4/24 high at 1.1246.  With RSI putting in a momentum extreme on 4/25 at 19.91 (daily), downside potential looks limited as the next few weeks may be dominated by sideways/corrective trading in order to correct the oversold condition (daily).  The next support level is the 9/01/2006 low at 1.1028 followed by the 261.8% extension of wave 1 (1.1879-1.1562) – at 1.1000.”  

AUDUSD – The AUDUSD has come under the 20 day SMA and briefly traded below .8233 support this morning.  Weekly RSI is divergent and above 70 for the first time since November 2004.  The rally from .7678 is an extended 5th wave, which are often fully retraced.  Near term resistance is at the 20 day SMA / 5/1 low at .8271/81.  Rallying above the short term resistance line indicates additional bullish potential and would negate our bearish bias.

NZDUSD – The resistance from the yearly trendline and the bearish MACD crossover (daily) along with daily RSI declining from above 70 suggest that we look lower but a break below .7348 is required before we can get aggressively bearish against .7491.  Former resistance at .7313 is now potential support.  Short term resistance is at the 5/1 high of .7445.   

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EURUSD – We are still focused on channel resistance that dates to the May 2006 high.  The rally stalled at this level last week and the spinning top candle on Wednesday also warns of at least a correction.  The monthly chart (using USD/DEM prices before 1999) shows a potential triple top with the July 1995 (1.3822) and December 2004 (1.3670) highs.  Daily RSI remains divergent with recent peaks and has declined from above 70.  The technical evidence for a reversal is stronger when one considers the complete one sided sentiment (speculative positioning is at a new record for euro longs for the third week in a row now).      

USDJPY – The USDJPY broke out from the 118.22-119.03 consolidation in what could be the C wave of an A-B-C triangle.  Remaining below 119.84 warrants a bearish bias for expectations of the reversal from the triangle breakout.  The short term triple top at 119.74 also gives scope to more bearish potential although a break above here potentially leads to a nasty short squeeze towards 119.84.  Former resistance at 119.03 is potential support.  A potential head and shoulders reversal is visible on the daily.        

GBPUSD – Cable has held at channel support so far, bouncing off of the 1.9900 figure yesterday.  Channel support along with the 3 wave decline from the top to 1.9864 strongly suggests that a new high will be established (above 2.0131).  1.9864 is critical to the bullish case and a failure there exposes former resistance (now potential support) at 1.9822.  We’ll focus on measured objectives in coming days (bullish targets).  

USDCHF – The USDCHF has put in a short term triple bottom near 1.2000 and rallied through trendline resistance to test the 1.2100 figure this morning.  The longer term wave structure is bullish as the decline from 1.2571 is a double zigzag (inverse of the EURUSD rally).  A longer term inverse head and shoulders pattern (May 2006, December 2006, April 2007) is also visible.      

USDCAD – There is little change regarding the USDCAD.  There is little doubt that the decline from 1.1825 is a 3rd wave.  Therefore, any rally should be treated like a correction as a 5th wave decline will eventually take the USDCAD to lower levels.  Initial resistance is the 4/24 high at 1.1246.  With RSI putting in a momentum extreme on 4/25 at 19.91 (daily), downside potential looks limited as the next few weeks may be dominated by sideways/corrective trading in order to correct the oversold condition (daily).  The next support level is the 9/01/2006 low at 1.1028 followed by the 261.8% extension of wave 1 (1.1879-1.1562) – at 1.1000.  

AUDUSD – The AUDUSD has bounced from the 20 day SMA but it remains our contention that the AUDUSD is reversing from a significant top.  Weekly RSI is divergent and above 70 for the first time since November 2004.  The rally from .7678 is an extended 5th wave, which are often fully retraced.  A break above the short term resisting line (shown below) opens up the door to new highs.  It is also possible that a triangle is forming from the .8390 high.  In this case, a terminal thrust to a new high would occur before a reversal.  As such, there is the opportunity to play the range within the triangle for now but beware of the aforementioned thrust through the top of the triangle.  

NZDUSD – The break below the 2 month trendline and the bearish MACD crossover (daily) along with RSI declining from above 70 suggest that we look lower.  Kiwi has also held below channel resistance.  The evidence warrants a bearish stance against the 4/18 high at .7491.  Former resistance at .7313 is now potential support.   

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