Euro Consolidates
Commentary: We are looking for a larger correction of strength in the near term, but upside potential remains. It looks like a complex correction is unfolding from the 1.3813 high (a-b-c-X-a-b-c, labeled W-X-Y). The correction is either complete at 1.3756 or will continue lower towards congestion at either 1.3731 or 1.3700. A cautious bullish bias is warranted against 1.3756, since it is possible that the mentioned complex correction ended at 1.3756.

Strategy: Flat

Japanese Yen - Look For Break above 122.08
Commentary: The USDJPY rally from 120.97 is in 5 waves, which strongly indicates that the entire decline from 124.13 was an a-b-c correction. The decline from 122.61 is corrective so far and ended near the 61.8% of 120.97-122.61 at 121.60. 120.97 must hold in order to keep the bullish structure intact. Ultimately, we are looking for a new high (above 124.13). A rally through 122.08 would indicate that a wave 3 up is underway, which should be powerful.

Strategy: Bullish now, against 120.97, target a break above 124.13, target TBD

British Pound Trendline at 2.0491
Commentary: Cable continues to subdivide higher. 1 month trendline resistance is at 2.0491 today. The rally from 2.0261 is the 9th wave in the rally that began at 1.9621. As we have commented on here before, reversals occur following completions of 5 wave structures - or derivations of 5 wave structures such as 9, 13, 17, etc. 9 waves means that one of waves 1, 3 or 5 is extended. For trading purposes, it does not matter which one is extended but rather that the probability is high that a reversal will occur. That said, Cable can continue to subdivide higher, towards the mentioned resistance line as well as 2.0500. Daily RSI is at 79, which is the highest since December 2006 (GBPUSD reversed then at 1.9847).

Strategy: Flat

Swiss Franc Correcting Back to 1.2068
Commentary: We wrote yesterday that “it appears that an ending diagonal may be unfolding from 1.2068. A drop below 1.1984 would complete 5 waves down from 1.2232 and give scope to a correction back towards 1.2068.” The USDCHF dropped to 1.1973 this morning and has reversed. Look for resistance at 1.2068. The form of the rally from 1.1973 will determine our course of action.

Strategy: Flat

Canadian Dollar Decline (USDCAD Rally) Corrective So Far
Commentary: There is no evidence yet that the bottom is in place though. The rally from 1.0416 is in 3 waves so far and therefore the structure remains bearish. A rally through 1.0497 would instill confidence in the upside.

Strategy: Flat

Australian Dollar Short Term Bullish Above .8707
Commentary: We wrote yesterday that “sideways consolidation is likely to occur in small wave iv (of v of 3) before a new high is extablished. A measured objective for the end of the advance from .8162 is the 161.8% extension of .8162-.8476/.8332 at .8840.” The Aussie appears headed to a new high (above .8762) as the rally from .8707-.8750 is a 5 wave affair. A bullish bias is warranted against .8707.

Strategy: Bullish now, against .8707, targeting .8840

New Zealand Dollar Ready for Correction?
Commentary: It is possible that a 3rd wave is complete at .7940. However, the decline so far has been uninspiring and the larger trend remain up. If wave 3 is complete, then look for wave 4 to unfold soon and bottom close to .7714 before a new high in wave 5. Ultimately, a measured objective for the end of the rally from .7237 is the 161.8% extension of .7237-.7637/.7452 at .8099.

Strategy: Flat

Jamie Saettele is a Technical Currency Analyst for FXCM.