Euro Should Correct To 1.57 Next Week

The EURUSD has completed wave i of larger 3 within the 5 wave bull cycle from 1.5283. Expectations are for wave ii of 3 to bring price back to at least 1.5720 next week. Bulls should use the decline to position for the expected break through 1.6018 (expected to occur towards the middle/end of July).

EUR/USD

The EURUSD is expected to exceed 1.6018 and continue on to all-time highs in the next few weeks. As mentioned yesterday, "the preferred count treats the advance from 1.5283 as a series of 1st and 2nd waves (1 and 2 of V). The rally from 1.5303 is wave i of 3." Wave i of 3 could extend to 1.6050/70 (measured moves) but minimum expectations are satisfied. The next ‘significant’ move should be back to 1.57 (at least). As such, lighten up on longs at this point.

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. 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.

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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