Euro 1.3600 Tested
Commentary: The bullish EUR/USD scenario continues. However, we wrote yesterday to “Keep risk tight once price reaches 1.3626, which is the 100% extension. A top and reversal there would indicate that a larger bearish cycle is likely underway from the top at 1.3852 (the alternate count is shown in black).” Near term support is at 1.3534.

Strategy: Remain bullish, against 1.3450, targets 1.3620 and 1.3730 (move to breakeven after 1.3620 is hit)

Japanese Yen Suggests Reversal in the Making
Commentary: As we noted yesterday, the USD/JPY counter trend rally is now running into a wall of resistance as the 117.00-118.30 area 19.34). Former support at 117.20 may now be resistance as the pair bounces into the Fib 50%-61.% retrace box. Yesterday the pair failed to hold the 117.00 figure, but may make second attempt to rally higher before faling once again.

Strategy: Look for a top and reversal near 117.90

British Pound 2.0153 Still in View
Commentary: Yesterday we wrote,” Given the ease with which Cable took out 2.0020, it is likely that we’ll see a test of 2.0203 (161.8% extension). There are a few different valid wave counts at the current juncture but the one that we favor labels the entire decline from 2.0654 as large wave A. The rally since is large wave B (although the rally from 1.9651 could just be the first leg of wave B). Resistance should be strong between 2.0153 and 2.0271 (50%-61.8% of 2.0654-2.0153). The mentioned 161.8% is also at 2.0203 (middle of the fibo zone) and this is a previous congestion area.” For the time being the price action in cable remains constructive to the upside as long as our support area of 1.9930 holds.

Strategy: Remain bullish, move risk to 1.9930 (from 1.9743), target 1 hit at 2.0020, target 2 is at 2.0200

Swiss Franc 1.1993 Key Level
Commentary: Our bear case spelled out in in the special report on the USD/CHF USD/CHF Bear continues to unfold. Near term, it looks like a top may be in place at 1.2111, so the 1.2130 short entry in the special report most likely will not be hit. Rallies have unfolded in 3 waves at varying degrees of trend, indicating to us that the larger trend is down. A break below 1.1993 instills confidence in the bearish case and gives scope to a test of the August 6 low at 1.1815. The first bearish target is the 161.8% extension of 1.2215-1.1993/1.2111 at 1.1753. For the time being the 1.2000 area is key, and if it breaks, it opens the possibility for the shaper move lower to retest the swing spike bottom at 1.1819.

Strategy: Bearish now, add to position on break of 1.1993, risk at 1.2215, move risk to 1.2111 on a break of 1.1993, targets 1.1760 and TBD

Canadian Dollar to Test 1.0340, Needs to Clear 1.0500 Support
Commentary: As we noted yesterday, “The bearish case is strong as long as price is below 1.0666.” The price action continues to resolve to the downside with the pair touching the 1.0500 fugure in overnight trade. In yesterday’s commentary we stated that “The 100% extension of 1.0866-1.0530/1.0666 is at 1.0331, close to the July 24 low of 1.0340. This is an intial bearish target. However, the pair will need to conclusively overcome the spike low at 1.0498 before inidicating further downside action.

Strategy: Remain Bearish against 1.0666, target 1.0340

Australian Dollar Surges Higher but Stalls
Commentary: The Aussie remains in a pattern of congestion with resolution seemingly evenly divided between the upside and the downside. As we noted in yesterday’s commentary,” This leaves open several possibilities but we favor labeling the decline from .8870-.7675 as wave A. The rally from .7675 is wave B (or just the first leg of wave B). Strength may continue until the 100% extension of .7675-.8092/.7955 at .8374. The 61.8% of .8870-.7675 at .8413 defends this level as well. Near term support is at .8120. We do not feel confident enough in the pattern to take action.”

Strategy: Flat

New Zealand Dollar Has Multiple Possibilities
Commentary: The kiwi has carved a near identical pattern to the Aussi as the pair now encounters overhead resitance from Fib retracments. As we wrote, “There are a few valid waves counts at the current juncture, but look for a test of the 100% extension of .6639-.7026/.6886 at .7273 before reversal potential. A former 4th wave/congestion area (.7201) may also prove formidable as resistance. We do not feel confident enough in the pattern to take action.“

Strategy: Flat

Jamie Saettele is a Technical Currency Analyst for FXCM.