Euro Breaks to Yearly Low; Pound and Franc Hold Up

The most bearish count places the EURUSD in a 3rd of a 3rd wave from 1.4179. 1.3820 is potential short term resistance.

EUR/USD

The most bearish count places the EURUSD in a 3rd of a 3rd wave from 1.4179. 1.3820 is potential short term resistance. Oversold RSI on multiple time frames warns of a larger pullback, so confidence in this very bearish count is low. Please keep in mind that the triangle and flat counts are still valid at the current juncture.

USD/JPY

I favor the downside as long as price is below the trendline from the 110.71 top. The 200 day SMA is sloping down (barely) and right at current price. Whichever way this break goes; it should be violent.

GBP/USD

Cable has yet to break its low. "The continued decline in Cable makes the decline from 1.8675 in 7 waves, which is a double zigzag correction. The GBPUSD is in the exact same position as the EURUSD; a flat or triangle is probably underway. Nothing is ever certain, but the weight of evidence suggests to me that a larger correction of the decline from mid July is more likely than a bearish break here. Evidence includes RSI (on this chart), and COT data."

USD/CHF

The flat and triangle counts remain preferred. One warning that the USD may begin to weaken in general is the fact that the EURUSD broke its recent low while the GBPUSD and USDCHF have failed to break their respective price extremes. This is a potential divergence.

USD/CAD

If the USDCAD pushes above 1.0827, then I’ll reassess. Until then, I am sticking with the bearish count. "Waves 4 and 5 are small relative to waves 1 through 3, but this is the best count I see right now."

AUD/USD

The decline from .8524 has taken the form of an impulse, signaling that the larger trend is down. Expect a rally (that should be corrective…the form of the rally will confirm or negate the bearish bias against .8524), and look for resistance beginning at .8101.

NZD/USD

Kiwi has been the quiet one of the bunch….there is no change to the count. "The advance from .6435 is in 3 waves so a the long term decline may be back underway. It is also possible that a larger correction is underway that will end closer to .72. Action over the next several days should help to clear things up."

DailyFX

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