EUR/JPY: Wave v as well as larger degree wave (C) ended at 94.11 and first leg of larger degree wave C upmove has possibly ended at 149.79 and wave 2 correction has possibly ended at 109.49.
As the single currency finally met resistance at 125.82 earlier this week and has retreated, suggesting consolidation below this level would be seen and pullback to 123.00 and possibly towards support at 122.55-60 cannot be ruled out, however, reckon 121.60-65 (38.2% Fibonacci retracement of 114.85-125.82) would limit downside and bring another rise later, above said resistance at 125.82 would signal recent upmove has resumed and extend further gain to resistance at 126.47 but price should falter below 127.50-60, risk from there has increased for another retreat to take place later.
The daily chart is labeled as attached, early selloff from 169.97 (July 2008) to 112.08 is wave (A) of B instead of end of entire wave B and then the rebound from there to 139.26 is wave (B), hence, wave (C) has possibly ended at 94.12 with a diagonal triangle as labeled in the daily chart, hence upside bias is seen for further gain. Recent rally above indicated retracement level at 116.69 (50% Fibonacci retracement of the intermediate fall from 139.26-94.12) adds credence to this view and signal major reversal has commenced but first leg of this wave C has possibly ended at 149.79, hence wave 2 has commenced with wave A ended at 126.09, followed by wave B at 141.06, wave C commenced and could have ended at 109.49, above 125.00 would add credence to this view.
On the downside, whilst initial pullback to 123.00-10 and then 122.55-60 cannot be ruled out, reckon downside would be limited to 121.60-65 and bring another rise to aforesaid upside targets. Only below indicated support at 120.60 would defer and risk deeper pullback to 120.00 but downside should be limited to 119.40-50 and support at 118.90-95 should remain intact, bring another rise later.
Recommendation: Buy at 121.60 for 124.50 with stop below 120.60.
To re-cap the corrective upmove from the record low of 88.93 (18 Oct 2000), the wave A from there is subdivided as: 1:88.93-113.72, 2:99.88 (1 Jun 2001), 3:140.91 (30 May 2003), 4:124.17 (10 Nov 2003) and 5 ended at record high of 169.97 (21 Jul 2008). The brief but sharp selloff to 112.08 is viewed as a-b-c x a-b-c wave (A) of B. The subsequent rebound to 139.26 is (B) of B and (C) of (B) has possibly ended at 94.12 and in any case price should stay well above previous chart support at 88.93, bring rally in larger degree wave C towards 150.00.
USD/CHF – Wave IV ended at 1.1730 and wave V has possibly ended at 0.7068
As the greenback dropped sharply after faltering below indicated previous resistance at 1.0108 and broke below previous support at 0.9813, confirming another leg of major decline from 1.0344 top is underway and bearishness is seen for further weakness to 0.9735-40, then 0.9675-80, however, near term oversold condition should prevent sharp fall below 0.9600-10 and price should stay well above previous support at 0.9550, risk from there is seen for a rebound to take place later.
Our preferred count on the daily chart is that early selloff to 0.9630 is an end of the larger degree wave III and major correction is unfolding from there with a leg ended at 1.2298 (Nov 2008 with (a): 1.0625, (b):1.0011 and (c):1.2298), wave b ended at 0.9910 with (a): 1.0370, (b): 1.1967, (c): 0.9910. The rise from there to 1.1730 is the wave c which also marked the end of wave IV and wave V has possibly ended at 0.7068.
On the upside, whilst initial recovery to 0.9840-50 cannot be ruled out, reckon upside would be limited to 0.9900 and bring another decline later. Above 0.9955-60 would defer and risk rebound to 1.0000 but upside should still be limited and price should falter well below resistance at 1.0100-08, bring retreat later. Only a break above this level would signal the rise from 0.9813 low has resumed and extend gain to previous resistance at 1.0171. Looking ahead, once this level is penetrated, this would signal the retreat from 1.0344 has ended, bring further gain to 1.0200-10, then test of resistance at 1.0248 resistance, only above there would add credence to this view and bring resumption of early upmove for an eventual retest of 1.0344.
Recommendation: Sell at 0.9900 for 0.9700 with stop above 1.0000
Dollar’s long-term downtrend started from 2.9343 (Feb 1995) and it was unfolding as a (A)-(B)-(C) with (A): 1.1100, (B): 1.8310 (26 Oct 2000), then followed by another impulsive wave (C) with wave III ended at 0.9630 (Mar 2008). Under this count, correction in wave IV has possibly ended at 1.1730 and wave V already broke below support at 0.9630 and met indicated downside target at 0.7500 and 0.7400. The reversal from 0.7068 suggests the wave V has possibly ended and the breach of resistance at 0.9595 add credence to this view and indicated upside target at 1.0000 had been met, however, the sharp retreat from 1.0296 to 0.7401 suggests choppy trading would be seen but price should stay above said record low at 0.7068.
EUR/GBP – The major (A)(B)(C)-(X)-(A)(B)(C) correction from 0.9805 is unfolding and 2nd (A) has possibly ended at 0.6936.
This week’s rally above indicated previous resistance at 0.8531 adds credence to our view that another leg of corrective rise from 0.8312 is underway and above this week’s high at 0.8615 would extend gain to 0.8650-60 and possibly towards 0.8700, however, as broad outlook remains consolidative, reckon upside would be limited and resistance at 0.8735 should cap upside, bring further choppy trading later.
Our latest preferred count is that the wave V of a 5-wave series from 0.5682 ended at 0.9805 earlier and major from there has possibly ended at 0.8067 as A-B-C-X-A-B-C. We are keeping our view that the entire correction from 0.9805 has possibly ended at 0.7756 and as labeled as the attached daily chart and impulsive move from 0.9084 has ended at 0.7756 as a 5-waver which marked either the (C) wave or the A leg of (C), a daily close above resistance at 0.8831 would suggest (C) leg has ended and headway towards 0.9084.
On the downside, whilst initial pullback to 0.8500-05 cannot be rule out, reckon 0.8455-60 would limit downside and bring another rise later. Below 0.8425-30 would abort and signal top is formed instead, bring test of indicated support at 0.8384 (last week’s low), however, only a daily close below there would shift risk back to downside and signal the rebound from 0.8312 has ended, then further fall to 0.8350-60 would follow.
Recommendation: Buy at 0.8500 for 0.8650 with stop below 0.8400
Euro’s long term uptrend started in Feb 1981 at 0.5039 and is unfolding as a (A)-(B)-(C) move with (A): 0.8433 (Feb 1993), (B): 0.5682 (May 2000) and impulsive wave (C) should have ended at 0.9805 with wave III ended at 0.7254 (May 2003), triangle wave IV at 0.6536 (23 Jan 2007) and wave V as well as wave (C) has ended at 0.9805.
We are keeping an alternate count that only wave III ended at 0.9805 and the correction from there is the wave IV and may extend weakness to 0.7700, however, it is necessary to see a daily close above resistance at 0.9143 would change this to be the preferred count.
USD/CAD – Wave v ended at 0.9407 and a-b-c correction may extend gain to 1.4700
As the greenback has retreated after rising to 1.3794, suggesting consolidation below this level would take take place and initial downside risk is for pullback to 1.3570 and possibly towards 1.3520-25, however, reckon downside would be limited from there and bring rebound later, above 1.3720-25 would suggest the pullback from 1.3794 has ended, bring test of 1.3770 resistance but break there is needed to signal recent upmove has resumed for retest of 1.3794, break there would extend the erratic rise from 1.2461 low for at least a strong correction of the fall from 1.4690 (2016 high) to 1.3800 and later 1.3835-40 (61.8% Fibonacci retracement of 1.4690-1.2461), however, overbought condition would limit upside to 1.3890-00 and price should falter well below psychological resistance at 1.4000, bring retreat later.
We are keeping our view that the wave b from 1.0657 (a leg top) has possibly ended at 0.9633 with (a): 0.9800, wave (b): 1.0447 and wave c at 0.9633, the subsequent rise from there is now treated as wave c exceeded indicated upside target at 1.3770-80 and 1.4000 and wave (3) has possibly ended at 1.4690 and wave (4) correction has commenced for retracement back to 1.2832 support, then 1.2410-20.
On the daily chart, our latest preferred count remains that the A of (B) rally from 0.9059 low (7 Nov 2007) unfolded into an impulsive wave with i: 0.9059-1.0380, ii ended at 0.9819, iii at 1.3019 followed by triangle wave iv at 1.2026 , then wave v formed a top at 1.3066 and also ended the wave A. The wave B is unfolding as an double three a-b-c-x-a-b-c and is sub-divided as a: 1.2192, b: 1.2716 and wave c at 1.0784, followed by wave x at 1.1725, another set of a-b-c unfolded with 2nd a at 0.9931, 2nd b at 1.0674. the 2nd c has possibly ended at 0.9407, therefore, consolidation with upside bias is seen for major correction, indicated target at 1.3900 had been met and gain to 1.4700 would follow.
On the downside, whilst pullback to 1.3570 cannot be ruled out, reckon downside would be limited and support at 1.3530 should remain intact, bring another rise later. A daily close below 1.3530 would defer and suggest top is possibly formed, risk weakness to 1.3450-60 but break of indicated support at 1.3411 is needed to add credence to this view, bring further fall to 1.3380-85, then 1.3335-40.
Recommendation: Exit long entered at 1.3650 and stand aside for this week.
Longer term – The selloff from 1.6194 (21 Jan 2002) to 0.9059 (07 Nov 2007) is viewed as (A) wave which is a 5-waver as labeled on the monthly chart as below, the subsequently rally is labeled as (B) with impulsive A leg of (B) ended at 1.3066, wave B of (B) is unfolding which has either ended at 0.9407 or would extend one more fall but downside should be limited to 0.9200 and 0.9000 should hold.