The USDJPY is testing critical support. A break below 102.50 would lead to an acceleration of the downtrend. Cable has soared as expected and the next level to watch is 1.9980/2.0025. The USDCAD could be about to turn higher (emphasis on could). Risk there is .9710.
The EURUSD has advanced as expected this week and faced resistance just above 1.5800. The possibility remains that this rally will reach a new high within the next 3 to 4 weeks so longer term bulls should be patient. Even if a larger correction is underway from 1.6018, then a test of 1.60 is possible, if not probable, because the drop from 1.6018 is in 3 waves. This would be wave A of a flat and B waves of flats often retrace 100% of wave A. In summary, stay bullish until further notice.
STRATEGY: Bullish, against 1.5630, target TBD
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There is no change to our USDJPY analysis as the pair has chopped lower and a bearish bias is warranted against 104.68. The potential for a sizeable decline in a 3rd of a 3rd wave within the bear cycle from 105.70 is what keeps us patient. This count remains favored but the alternate treats the consolidation since 105.70 as an X wave (probably will form into a triangle), which will lead to a new high in wave Z before the larger decline resumes. A drop below 102.57 would inspire confidence in the larger bearish bias.
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STRATEGY: Bearish, against 104.68, target TBD
As expected, Cable has soared this week in what is probably the final leg of a corrective advance from 1.9337. Expectations are for the pair to eventually exceed 2.04. Near term, the break through a short term resistance line sets sights on a longer term trendline near 1.9975. Also, expect resistance from former highs in the 1.99-2.0025 range. Risk on longs can be moved to 1.9683.
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STRATEGY: Bullish, against 1.9683, target above 2.04
There is no change to the USDCHF pattern as the pair is tracking our preferred count. “We view the rally from .9674 as an A-B-C advance (corrective) but this does not mean that the larger downtrend is back underway (similar to the EURUSD). The advance may well be the first leg in a larger, more complex upward correction but a sizeable decline is expected regardless (probably into parity).” Short term resistance is at 1.0322.
STRATEGY: Bearish, against 1.0572, target TBD
We should know very soon whether or not we are completely wrong in our assessment of the USDCAD. We’ve been bulls and waiting for a buying opportunity. We were given that opportunity as the USDCAD dropped into support from the 78.6% of .9710-1.0324 at .9841. The pair must remain above .9710 for us to remain bulls.
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STRATEGY: Bullish, against .9710, target above 1.0324
Kiwi is tracking our preferred count (short term) and came just pips from triggering the bullish objective at .7915 this morning. “There are 5 waves up from .7536 and a corrective decline to .7710, indicating with a high probability that the next leg up in the NZDUSD is underway. A bullish target is .7947 (100% extension).”
STRATEGY: Bullish, against .7710, target .7915
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[1] STRATEGY is a 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.
