Euro Bullish Above 1.3371
Commentary: 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. Watch the 1.3550 area for resistance as well. The 6/5 high is 1.3552 and the 100% extension is at 1.3547. The structure is bullish as long as 1.3371 is intact.

Strategy: Bullish, against 1.3371, targeting 1.3656

Japanese Yen Correction
Commentary: We wrote last week that “the USDJPY is likely to subdivide in a 5th wave before a correction. In other words, now is not the time to get bullish. Overbought and divergent RSI along with channel resistance indicate the potential for a pullback.” That pullback is underway right now. There is potential now for a drop to the support line, drawn off of the 4/19 and 6/8 lows, near 122.15. The longer term bull trend is bullish above 120.76. “It is our working assumption that the USDJPY is working higher in a C wave towards the 128.00 area over the next few weeks/month. The 78.6% of 135.13-101.67, the 100% extension of 108.98-122.17/115.14, and the 100% extension of 101.67-121.39/108.98 are between 127.97 and 128.70.”

Strategy: None

British Pound Tests 2.0000
Commentary: We wrote Friday that “potential resistance is at the 161.8% extension of 1.9883-1.9939/1.9910 at 2.0001.” Cable pushed to 2.0005 and a 5 wave advance (from 1.9621) is complete (or very nearly so). Thus, a pullback is expected, with initial support at 1.9883. We’ll look to align with bulls close to channel support (see chart above).

Strategy: None

Swiss Franc Move Is Impulsive (USDCHF Bearish)
Commentary: We wrote yesterday that “the final leg of the correction is likely to play out the rest of the week towards the 61.8% of 1.2145-1.2476 (1.2271).” The USDCHF has enjoyed a minimal bounce from 1.2268 this morning. The next level of potential support is the 161.8% extension of 1.2476-1.2353/1.2424 at 1.2225. The decline from 1.2424 looks more like a 3rd wave than a wave c, thus we are abandoning the bullish stance.

Strategy: None

Canadian Dollar Close to Channel Line
Commentary: There is no change to our outlook for the USDCAD. “Price is approaching potential channel resistance, which is just below 1.0800. We are looking for this correction to continue towards channel resistance before a 5th wave decline brings the USDCAD below 1.0548.”

Strategy: None

Australian Dollar Irregular Flat?
Commentary: The short term wave structure is unclear but the series of lower highs keeps us looking higher. The short term trend is considered bullish as long as price is above .8428. The longer term trend is considered up as long as price is above .8332. However, the rally from .8332 is suspect and may be the b wave in an irregular flat correction. If this is the case, then price is likely to fall from close to current levels towards .8332.

Strategy: None

New Zealand Dollar Short-Term Bearish
Commentary: The short term wave structure is unclear but the series of lower highs keeps us looking higher. The short term trend is considered bullish as long as price is above .8428. The longer term trend is considered up as long as price is above .8332. However, the rally from .8332 is suspect and may be the b wave in an irregular flat correction. If this is the case, then price is likely to fall from close to current levels towards .8332.

Strategy: None

Jamie Saettele is a Technical Currency Analyst for FXCM.