Euro Bullish but Watch 1.3550
Commentary: Our count is tracking well so there is no reason to change our outlook. “The push through 1.3437 signals that wave iii, of a 5 wave rally that began at 1.3261, is underway. An objective is 1.3656, the 161.8% extension of 1.3261-1.3437/1.3371.” Be careful at 1.3550, which is the 100% extension of 1.3261-1.3437/1.3371 and the 6/5 high (1.3552). While we are looking for a test or a marginal break of 1.3680, we are expecting the next big move to be down towards the mid 1.2000’s.

Strategy: Bullish, against 1.3414, targeting 1.3656

Japanese Yen Triangle Breakout USDJPY Bearish
Commentary: We wrote yesterday that “we are publishing a 5 minute chart this morning to show the potential bullish structure that is forming from 122.23.” As it happened, the USDJPY broke higher from a bullish triangle, which means that this rally is terminal (will be reversed). A potential end for this short term rally is 123.72/90, which is the 78.6% of 124.13-122.23/123.72 and the 100% extension of 122.23-123.36/122.77 (rally could reverse prior). A larger complex correction is playing out from 124.13 (W-X-Y). After the reversal, we are looking for a drop below 122.23.

Strategy: Look for bearish opportunity at 123.72/90 against 124.13, targeting below 122.23

British Pound Stalling
Commentary: We wrote yesterday that “we are publishing a 5 minute chart this morning to show the potential bullish structure that is forming from 122.23.” As it happened, the USDJPY broke higher from a bullish triangle, which means that this rally is terminal (will be reversed). A potential end for this short term rally is 123.72/90, which is the 78.6% of 124.13-122.23/123.72 and the 100% extension of 122.23-123.36/122.77 (rally could reverse prior). A larger complex correction is playing out from 124.13 (W-X-Y). After the reversal, we are looking for a drop below 122.23.

Strategy: Look for bearish opportunity at 123.72/90 against 124.13, targeting below 122.23

Swiss Franc Stronger Across the Board
Commentary: We wrote yesterday that “we are publishing a 5 minute chart this morning to show the potential bullish structure that is forming from 122.23.” As it happened, the USDJPY broke higher from a bullish triangle, which means that this rally is terminal (will be reversed). A potential end for this short term rally is 123.72/90, which is the 78.6% of 124.13-122.23/123.72 and the 100% extension of 122.23-123.36/122.77 (rally could reverse prior). A larger complex correction is playing out from 124.13 (W-X-Y). After the reversal, we are looking for a drop below 122.23.

Strategy: Look for bearish opportunity at 123.72/90 against 124.13, targeting below 122.23

Canadian Dollar 30-Year Highs (USD/CAD Lows) - Objective at 1.0400
Commentary: The 5th wave of the decline that began at 1.1879 is close to an end and a multi year advance is likely to begin in the next few weeks. A potential end for the current decline is 1.0400, which is channel support. Still, the decline under 1.0548 satisfies minimum expectations. Since the USDCAD is in a 5th wave, we do not see this as a breakout opportunity. We are showing the weekly chart with the long term outlook (2 to 3 years).

Strategy: None

Australian Dollar Topping?
Commentary: We got the rally through .8510 that we were looking for earlier than expected. The Aussie may very well extend higher but we see a possible 5 waves up (not very clear) from .8355, so we are moving to flat after getting bullish yesterday. A correction at least to .8454 is expected. Our next decision will be based on the structure of the decline from .8521.

Strategy: Move to flat

New Zealand Dollar Breakout Looks Healthy
Commentary: No change in Kiwi. “Looking at the rally from .7237, it is possible that Kiwi is just now entering a third of a third wave that could see the pair test .7848-.8093 in the next couple of weeks (this is the 100%-161.8% of .7237-.7637/.7452). The alternate count is that an ending diagonal from .7237 is close to complete and that a decline will begin soon. Remaining above .7571 keeps the former count favored.” Based on the outlooks for Kiwi and Aussie, AUDNZD looks likely to accelerate its decline.

Strategy: Bullish now (breakout), against .7571, target TBD (above .8000)

Jamie Saettele is a Technical Currency Analyst for FXCM.