Euro 1.3485 Remains Bullish Line in the Sand

1.3485 remains the key level for short term EURUSD bulls. If the larger pattern is bullish, then the pair should reach 1.40-1.42 in the next week.

EUR/USD

Repeating last night's commentary “the beginning of a larger move is usually ugly and unclear. Such is the case here with the EURUSD. Still, wave rules have not been broken in the count presented above and there is no change to the bullish outlook - I am treating the advance from 1.3257 as a series of 1st and 2nd waves. This count is valid as long as price is above 1.3485. The EURUSD has bounced from 1.3546; the 78.6% of 1.3485-1.3773. There is a Fibonacci confluence near 1.42, which is a potential target about a week out. Euro traders may wish to take a look at Euro crosses for long term trades.

USD/JPY

Resistance has been strong the past few days near 103, psychological resistance as well as the 50% of the decline from 108.07. This is also where wave a and c equal (if the rally from 97.88 is indeed an a-b-c advance). A bearish bias is warranted against the recent highs (103.10).

GBP/USD

The rally from 1.6775 is an impulse (5 waves) and a corrective decline from 1.7635 may be complete at 1.7375. The position of the EURUSD suggests that a corrective decline in the GBPUSD is complete at that level, so a bullish bias is warranted. 1.8266 would be where waves C and A would be equal assuming that the rally from 1.6775 ends up as an A-B-C advance.

USD/CHF

5 waves up from 1.0686 and 3 waves down to former support is bullish for the USDCHF. The alternate is still bullish, but the next leg up advance would not occur until a drop below 1.1125 that completes a larger correction from 1.1493.

USD/CAD

The USDCAD drop from 1.2132 has held short term trendline support. A closer look at the decline reveals that it is an impulse though and that the line will most likely be broken. I wrote yesterday to “expect an advance into the Fibonacci zone (1.1612-1.1808) before weakness resumes into the 1.0962-1.1176 area.” The USDCAD has entered that zone so be on the lookout for a top and reversal.

AUD/USD

The AUDUSD advance from .6326 is in just 3 waves to this point, leaving the AUDUSD vulnerable to weakness and a drop below .6326. However, it is still possible that a 5th wave does take hold from near current price and completes an impulse sequence. A bullish outcome is favored as long as price is above .6790.

NZD/USD

With 5 waves potentially complete from above .82, a correction should reach the former 4th wave (defended by the 50%) at .70. The advance could accelerate in the coming days.

DailyFX

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