EURUSD
LONG TERM – BEARISH - Our long term outlook remains unchanged in that we count last year’s rally from .8228 as a correction within an underlying bear trend, with eventual targets between .70/.75 on the downside.
MEDIUM TERM – BULL RANGE - However, what it also implies is that that advance was wave “A” and that the subsequent decline from there to .8350 was an extended wave “B”. The rally to .9325 was now most likely wave C of a larger contracting triangle, and is usually followed by waves D and E. This eventually would complete a more irregular medium term triangle formation.
SHORT TERM – BEAR RANGE – This rate looks set to trace out a protracted range between .8850/.9150 over the coming weeks before heading to the downside, given the failure to break trendline support at .8870 on Friday. While that trendline support is the neckline of a large potential head and shoulders formation around the .9325 high, and if broken would project a move to .8400/.8380, until it is, further range trading is expected. Daily oscillators remain oversold, giving encouragement to the argument for further rallies. The nature of recent price action almost affirms that wave C was completed at .9325, and that we are now in wave D of the larger triangle formation. Today expect .8880 support to hold and fuel further upside.
SUPPORT – .8870(trendline) .8825 (key low)
RESISTANCE - .8960 (prev high), .9125 (prev highs)
TRADE STRATEGY – Buy at .8910 risking .8870 targeting .9050.

USDCHF
LONG TERM – BULLISH - Frequent readers will be aware our longer term outlook for this rate remains bullish, arguing for an eventual new high over 1.83. This is due to the fact that we view the 1.8310 high as a wave 3, and the recent lows at 1.5675 as a wave 4 ahead of a new wave 5 high into the 1.90/2.00 area.
MEDIUM TERM - BULL RANGE – Within the recent 4th wave, we count the low at 1.59 in January wave A, the 1.8210 high wave B and the recent declines wave C. Although the rallies from 1.5690 are not clearly impulsive, we will continue to operate on the view that wave C is now likely in place.
SHORT TERM – RANGE – Friday’s gains were restrained by the neckline of a possible inverted head and shoulders formation, intersecting around 1.6500, and fueled a run back to the downside. This failure means that a a larger range is now likely to play out over the coming week, and retracement back to 1.6250/1.6130 is possible. Sell rallies today to 1.6430.
SUPPORT – 1.6245 (prev low) 1.6395(overnight low)
RESISTANCE – 1.6500 (neckline) 1.6580 (62% Fib)
TRADE STRATEGY – Sell at 1.6410 risking 1.6480 targeting 1.6300.

USDJPY
LONG TERM – BULLISH - The longer term picture here counts the advance from the 101.25 Jan 2000 low to the 101.85 March 2000 high as wave 1, the sideways pattern that terminated at 104.60 in September 2000 as wave 2, and the advance to 126.85 this January as wave 3. The correction from that high is wave 4 and should not move back through the 111.85 high for there to be any further chance for gains back to or through 126.85. Within this 4th wave, we appear to have completed the final C wave of the correction at 115.85, and the gains since then do also appear to be impulsive in nature.
MEDIUM TERM – WAVE 2 CLOSE TO COMPLETION - Wave 1 completed at 123.25 and now wave 2 has all but met the 50% retracement at 119.60. We are on the lookout for a turn higher again.
SHORT TERM – BASE FORMING? – The likelihood of a larger abc formation being complete grows, as the rally from 119.80 continues to move to the topside. Friday we looked for one more new low to complete the declines, however the likelihood is strong that the market will move above 120.65 resistance today and in so doing will suggest a base in place. The wave count from the low does not look impulsive at all though, making it tough to justify a bullish position however, and keeping alive the possibility of a final new low. Use 120.65 as a pivot today therefore.
SUPPORT – 119.60 (50% Fib) 118.75 (61.8%)
RESISTANCE – 120.65 (overlap) 121.10(overlap) 122.10 (prev high)
TRADE STRATEGY – Neutral.

GBPUSD
LONG TERM - BEARISH - Our longer term outlook for this rate in unchanged, in that we believe Cable will eventually decline towards the 1.30/1.27 levels and possibly as low as the 1.13 area over the coming years.
MEDIUM TERM – BASE OF RANGE - Under this scenario we see declines from the 1.7380 November 1999 high to the recent 1.3690 low as only 3 waves down, with the current retracement likely only a 4th wave. Within 4, we view the advance to 1.4845 as wave A, and the decline to 1.4190 as wave B, ahead of a new high towards 1.51 in C in a larger zig-zag formation.
SHORT TERM – STILL IN RANGE – Friday’s aggressive recovery from 1.4475 probably completed the entire correction from 1.4685, and remarkably still keeps alive the prospect for a new high on the 1.47 handle. We expected a more protracted decline to 1.4440, but the early reversal requires us to keep alive the bull case. Expect support at 1.4540/20 to be tested today, and then a further rally.
SUPPORT – 1.4540 (38.2% Fib) 1.4520 (61.8% Fib)
RESISTANCE –1.4595 (high) 1.4685 (highs)
TRADE STRATEGY – Buy at 1.4540 risking 1.4480 targeting 1.4650.

EURGBP
LONG TERM – BULLISH - Our longer term outlook remains that the decline from the 9019 high in November 95 to the 2000 low at .5690 was a 5 wave decline and therefore one which should eventually be retraced. The targets for this retracement remain the previous 4th wave high at .7171 and additionally Fibonacci resistance points between .6960 and .7350. Therefore our bias is positive.
MEDIUM TERM - BULL RANGE - What do the gains from .5690 look like, apart from a big range? At this juncture we view the first advance to .6425 as wave A or 1, the sideways price action between there and the recent May .5955 low as wave B or 2, and advances since then an emerging wave C or 3 that should take us back above .6445 and on towards the targets mentioned above. The alternative is that the rally to .6425 was wave A and that wave B is not yet completed and instead is a larger triangle formation, but should be complete with a new low around .6070 trendline support in coming weeks, before a final wave C advance takes us higher.
SHORT TERM – STILL LOOKING FOR A BASE – No sign of a base in place yet, despite the proximity of supports, as the wave count from .6115 the low does not look impulsive. Still a risk of a final new low therefore.
SUPPORT - .6115 (minor support) .6100 (interim support) .6070 (prev low)
RESISTANCE – .6165 ( high/trendline) .6240 (interim high) .6300 (prev high)
TRADE STRATEGY – Buy at .6095 risking .6060 targeting .6165.

EURJPY
LONG/MEDIUM TERM – BULLISH - Our long term outlook remains unchanged as we continue to believe that a 5 wave advance completed at 113.70 in wave A or 1, and that the subsequent ABC correction was completed at the recent 99.85 low in wave B or 2. Eventual targets therefore are towards 120-125. However we do note that the gains from 99.85 are not looking as impulsive as we would have expected, and as such raise the risk not only of a deeper correction back to as low as 106.20/105.50, but maybe even a final decline to 99.85 again, which would mean that the correction from 113.70 was not in fact finished, but still underway, with a final C wave down still to go.
SHORT TERM – CRUNCH TIME - Last week’s break of trendline support from the 89.00 low intersecting at 107.80 continues to raise the risk of a further decline towards 106/105.50 despite the recovery back towards 107.80/90 resistance. Daily studies are basing as well, and a convincing move back through 108.20 will invalidate the bear view, but while under trendline resistance, the bearish bias has to be favoured at present, at least for a final new low. Use 107.90/108.20 as pivots today. SUPPORT – 106.00 (prev low) 105.50 (range low)
RESISTANCE – 107.90 (trendline) 108.20 (overlap)
TRADE STRATEGY – Sell at 107.85 risking 108.25 targeting 106.20.

EURCHF
LONG TERM - BEARISH - This market has been in a huge multiyear trading range between 1.80/1.49 for the last 25 years. This range has now effectively broken with the move through 1.5040/1.4960, potentially driving this Rate into a new bearish trading range.
MEDIUM TERM – BEAR RANGE - Downside targets can only be generated by Fibonacci and wave based extensions, and the 1.40 and below areas certainly loom large. Over the medium term, the declines since 1.5220 have found good support at 1.44, with that move lower now being retraced.
SHORT TERM – BULL RANGE – We still view the rally to the latest highs at 1.4920 as a large wave ‘a’ of a zigzag correction, and wave ‘b’ should finally be complete at yesterday’s 1.4630 low, meeting our downside targets in the process. Daily studies remain oversold, and despite the failure to break back above 1.47 on Friday, we still think it possible that wave ‘c’ is underway towards 1.4920 again. If so, 1.4630 must not be broken. Even a new low would only be a marginal and final one, so buying a new low could be a good option as well.
SUPPORT – 1.4605 (62% Fib)
RESISTANCE – 1.4705 (interim high) 1.4775 (highs and trend line) 1.4835 (recent high) 1.4900
TRADE STRATEGY – Buy at 1.4605 risking 1.4580 targeting 1.4710.

AUDUSD
LONG TERM - BEARISH - The long term count here remains clear. The rallies from .4775, last year’s lows, appear to be corrective in nature, meaning that the long term downtrend in this rate remains in place. In terms of Fibonacci projection targets, we only can see the .37 level as a major target zone.
MEDIUM TERM – BEARISH - Looking at the medium term, the recent rallies were either an ABC formation completed at the recent .5393 high, or the market is still in a B wave which will still see a C wave rally back to .53/.54 before another collapse occurs. Under either scenario though, the long term trend will remain down.
SHORT TERM – BULL RANGE – No real change. Our view is that within an overall ABC correction, either wave B probably finished at .4810, and that the market is now in a C leg higher, which should eventually extend towards .5250/.5400 before stalling. Or alternatively that the ABC correction was finished at .5395 and we have had wave 1 down in the next bear leg to .4810, and now we are in wave 2. Under both scenario’s, we still need a rally higher. The gap higher overnight suggests that further strength will be seen and that .5145 support will hold today. Buy that dip for further upside extension.
SUPPORT – .5145 (interim high) .5105 (prev low)
RESISTANCE – .5245/55 (key resis, 61.8% Fib) .5285 (congestion)
TRADE STRATEGY – Buy at .5160 risking .5140 targeting .5235.

USDCAD
LONG TERM – BULLISH - Our long term outlook remains very much intact, in that we have been counting the 1998 high at 1.5850 as the end of a third wave, and that price action since then all the way back to the 1.4310 lows last year is simply a 4th wave correction. Under this scenario, we still target a move in the coming months towards the 1.65/70 area at least.
MEDIUM TERM – BULLISH – Frequent readers of our notes will be aware that from a medium term point of view we have been faced with two options. Whether we are going to see a larger 4th wave range develop or whether it actually completed at the 1.4310 lows. In recent notes evidence has pointed to the fact that a significant base was developed at those lows and that the gains to 1.5845 are actually a starting diagonal wave 1. However, within this move we had been suggesting that the decline from 1.5825 to 1.5100 was a wave “A”, and that under this scenario the move back towards 1.5810/45 a wave “B” leaving the market open for a final “C” wave decline back towards 1.51 to complete wave 2. The break of 1.5845 obviously invalidates this view, signaling we are already back within the underlying bull trend towards the targets mentioned above.
SHORT TERM – BULLISH – Our targets at 1.60 have now pretty much been met and while we still think the advance from 1.5690 is starting to look complete as long as 1.5990 holds further gains towards 1.6075 could be seen. This should still complete wave 3 higher within the advance from 1.5560, after which a short correction back maybe as low as 1.5890 can be seen for wave 4, then a final 5th wave should complete around 1.61/62. This should finish the advance from 1.5060. Short term, use 1.5990 as a pivot for any further gains, as below there and we slip back to 1.5890.
SUPPORT – 1.5990 (wave overlap) 1.5890 (prev low) 1.5790/80 (overlap level)
RESISTANCE – 1.6060 (minor resis)
TRADE STRATEGY – Neutral.