Euro Correction Unfolding

As we noted yesterday, “The next 'significant' move should be back to 1.57 (at least). As such, lighten up on longs at this point.”

EUR/USD

As we noted yesterday, “The next 'significant' move should be back to 1.57 (at least). As such, lighten up on longs at this point.” The downward move is unfolding but we continue to believe that it is corrective in nature. As such our bias remains to the long side.

STRATEGY: Bullish, against 1.5303 (but lighten up), target is above 1.6018

USD/JPY

The USDJPY reversed at 106.75, near the 50% of 108.41-104.99. It is possible that the USDJPY will accelerate lower in a 3rd of a 3rd wave so a bearish bias is warranted against 106.75. A push through there would probably lead to a test of the 61.8% at 107.10 (also former congestion). As is evident from the chart above, there are a number of counts that are valid right now, so price action in the next few days should resolve things.

STRATEGY: Bearish, against 106.75, target TBD

GBP/USD

A C wave (of either a triangle or flat) is underway. If a triangle, wave C likely continues until 2.02 (March 27 top). If a flat, wave C will continue through 2.04. The pair has tested 2.00 today so expect a sizeable reaction (lower). 1.9800 should provide support. In overnight trade 1.9800 appears to have held well and continues to be short term support for sterling. This is the confluence of the 50% of 1.9583-2.0006 and 6/27 low.

STRATEGY: Bullish, against 1.9583, target 1 at 2.0175, target 2 TBD

USD/CHF

The USDCHF is probably on its way to a new low. The advance from .9647 is in 3 waves and therefore corrective. 3 wave movements are eventually completely retraced. A bearish bias is warranted against 1.0493. Near term, a push through 1.0227 is likely. Look for resistance near 1.0266.

USD/CAD

This is a close up view of wave E of the triangle (which is larger wave B within an A-B-C from .9055). With the advance from 1.0047 taking an impulsive look, probability is high that the wave E low is in place. Waves 1 and 2 of the breakout wave appear complete. The rally should accelerate now. Overnight the loonie continued to weaken approaching the 1.0300 figure.

STRATEGY: Bullish, against .1.0047, target above 1.0324

AUD/USD

The rally from .9511 is an impulse, indicating that the AUDUSD trend remains up. A small correction should play out over the next few days. Look for support near .9581 and .9563. A bullish bias is warranted against .9511.

STRATEGY: Get bullish near .9570, against .9511, target above .9667

NZD/USD

Bigger picture, the NZDUSD is expected to advance to the 50% of .7921-.7445 at .7683 and perhaps even the 61.8%-78.6% at .7740-.7920. A rally to there would fill the 6/4 gap. The up-down sequence from .7445 is probably waves A and B. Wave C is considered underway as long as price is above .7530.

STRATEGY: Bullish, against .7530, target TBD

DailyFX

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