EUR/USD â�,�“The A-B-C zigzag correction that we focused on yesterday that ended at 1.2700 is now classified as one corrective wave with the move up to 1.2872 as the second wave of the larger 3 wave corrective pattern.  Thus, we are now in the third wave, which could lead to a sharp drop in the pair.  Fibonacci extensions of 138.2% and 161.8% of 1.2970-1.2700 lead to 1.2500 and 1.2434.  Also of note is the 5/4 low at 1.2570.  A return to strength within the corrective channel encounters yesterdayâ�,��"�s high at 1.2872.  Declining daily oscillators continue to favor shorts as do hourly oscillators, which are declining but not even close to being overextended.

USD/JPY â�,�“ Like EUR/USD, USD/JPY trades in a 3rd wave of a larger correction, having rallied just beyond the 5/11 high at 111.55.  the break above the 5/17 high at 111.33 and the 111.55 high give scope to continued strength towards the 5/1 low at 112.33 as well as fibo extensions of 108.96-111.33 at 113.56 (138.2%) and 114.12 (161.8%).  Immediate support is at 111.33 in the event some correction of the recent move up.  However, a break below there would be damaging to this rally and possibly fail towards 110.29 â�,�“ yesterdayâ�,��"�s low.   

GBP/USD â�,�“ Cableâ�,��"�s correction of the larger uptrend has lacked the conviction of the other pairsâ�,��"� corrective moves â�,�“ a testament to the overall strength of the move to 1.9000+.  Still, the move is corrective and additional weakness is suggested by the long reverse hammer and inside day on the daily chart from the past two days.  The corrective pattern has taken place primarily between 1.8950 and 1.8750 but a break below 1.8745/50 could lead to a rapid decline towards the 23.6% fibo of 1.7229-1.9027 at 1.8603.  A bounce off of 1.8750 (current price) sends the pair back towards the upper end of the consolidation near yesterdayâ�,��"�s high at 1.8945.

USD/CHF â�,�“ USD/CHF is continues to mirror EUR/USD.  After bouncing off of the lower trendline near 1.2050, the pair has made a rather impulsive move to 1.2190.  At this point, moves up appear to be actionary with moves down reactionary.  If the pair does trade to and hold that support then a bout of strength towards the 1.2187 high from yesterday is possible.  A break above the channel near 1.2225 exposes the 5/11 high at 1.2304.  Support is at the 38.2% and 50% fibos of 1.1918 and 1.2193 at 1.2088 and 1.2056.

USD/CAD â�,�“ USD/CAD blew by the resistance that was fortified by the â�,��"23.6% fibo of 1.1771-1.0969 / 5/2, 5/9, 5/15 highs / 20 SMAâ�,�.  That break above bolsters the bullish bias and gives scope to a test of the 38.2% fibo of 1.1771-1.0969 at 1.1274.  Weâ�,��"�ll focus again on the long term picture and reiterate that long advances and declines can be broken into 5 waves.  Dividing the wave near the end of a corrective 4th wave often projects the end of the decline (or advance) by a Fibonacci multiple (.382 or .618).  The chart below shows that we are very close to the 131.8% fibo.  However, a break below 1.0897 would suggest that the end of the decline is not until the 161.8% fibo at 1.0373 (calculations on the chart).  With the break above 1.1175, the mentioned 1.1274 and the 3/2 low at 1.1297 are now resistance. 

AUD/USD â�,�“ AUD/USD is little changed from yesterday.  The pair rests right at the 20 day SMA, which is gradually changing slope from positive to negative.  The hourly chart is similar to EUR/USD in that the corrective move has taken the form of a zigzag.  Support and resistance is connoted by the trendlines that form the corrective channel â�,�“ about .7675 for resistance and .7525 for support.  CCI broke below 0 for the first time since 4/4 when the pair was closed at .7202 â�,�“ signifying that momentum now favors shorts.

NZD/USD â�,�“ Very similar to the Aussie, Kiwi is little changed from one day ago and has spent time in a downward sloping channel after plummeting from .6450-.6200 last week.  It is still important to keep in mind that the head and shoulders reversal pattern calls for more weakness as the pair has tested its neckline twice this week.  With so many tests of that level â�,�“ a break below could be violent as there are likely many orders around that area.  Support is below at the 61.8% fibo of .5991-.6217 at .6165 followed by the 76.4% fibo at .6098.  A break above the left shoulder high at .6372 would decrease probability of this reversal to the downside playing out.