Euro Continues to Slip
Commentary: We continue to view the decline from 1.3838 as wave C in a larger A-B-C correction from 1.3852. Price is likely to continue lower towards the 100% of 1.3852-1.3608/1.3838 at 1.3595. The next bearish target is the 161.8% extension at 1.3445. We mentioned Friday that a bounce towards 1.3714 would complete a smaller correction and give way to the downside. The EURUSD rallied to 1.3708 last night before declining to current levels. The fact that the decline from 1.3825 to 1.3641 is in 5 waves bolsters the bearish outlook.

Strategy: Remain Bearish against 1.3824, targets 1.3600 and 1.3450

Japanese Yen 119.83 Determines Bias
Commentary: TheUSDJPY decline from 119.83 is likely the first leg lower in the next bear wave. Look for a rally above 118.74 to challenge the 61.8% of 119.82-117.21 at 118.83 and possibly the 78.6% at 119.27 before a top and reversal. The bearish bias is strong below 119.83.

Strategy: Flat, look to get bearish between 118.83-119.27, against 119.83, targets below 117.15

British Pound Bearish Below 2.0269
Commentary: We wrote yesterday that “the best count has the decline from 2.0461 as large wave C in an A-B-C from 2.0654 (same as EURUSD).” The bearish targets are 1.9989 and 1.9697. The decline from 2.0397 is likely the third wave within larger wave C. Look for the decline to accelerate in the next day. The bearish bias is favored as long as price is below 2.0269.

Strategy: Remain bearish, against 2.0269, targets 2.0000 and 1.9700

Swiss Franc Nears Reversal Point
Commentary: The USDCHF pattern is not completely clear but there is little doubt that the recent rally is corrective in nature. Thus, we are expecting a top and reversal close to current price (the 61.8% of 1.2165-1.1815 at 1.2032 is a potential reversal point). It is also possible that the recent thrust higher was from a small triangle. This fits with the idea of a top and reversal near current price. As mentioned last week, the larger bearish pattern is intact as long as price is below 1.2165.

Strategy: Remain Bearish against 1.2165, target 1.1400

Canadian Dollar Correction Should End Soon
Commentary: We maintain that the USDCAD is in a rally leg that will push through 1.0699 (likely next week). Target are 1.0821 (100% extension of 1.0340-1.0699/1.0462) and 1.1043 (161.8% extension). The rally from 1.0462 is either larger wave C or 3. This view is favored as long as price is above 1.0462. Very near term, it is possible that price drops below 1.0514 to complete a small correction.

Strategy: Remain Bullish, move risk to 1.0462 (from 1.0340), targets 1.0821 and 1.1043

Australian Dollar Two Possible Scenarios
Commentary: There are two scenarios that we are following closely. One is that the AUDUSD is in the process of forming the wave 4 low and that price is headed higher immediately in wave 5. The other has wave C of 4 still in progress and therefore price continuing lower towards the 100% extension of .8870-.8444/.8661 at .8235 before a low is extablished. A drop under .8398 strongly suggests that the latter scenario is playing out.

Strategy: Flat

New Zealand Dollar Continues Lower in Wave C
Commentary: Kiwi continues to work lower in wave C of the A-B-C correction that began at .8108 on 7/24. A measured objective for the end of the decline is the 100% extension of .8108-.7666/.7701 at .7125. Chart support is at .7237 (5/24 low). The near term bearish bias is strong as long as price is below .7488.

Strategy: Flat

Jamie Saettele is a Technical Currency Analyst for FXCM.