Euro 1.3750 Potential Resistance
Commentary: We wrote last week that “we see potential for a third of a third wave to unfold towards the 161.8% extension of 1.3370-1.3546/1.3450 at 1.3734.” The EURUSD is closing in on the 1.3730 target. Near term support is at 1.3627. The advance from 1.3360 has stalled near the 61.8% retracement from the top (1.3852) to 1.3360. A larger more complex correction may be playing out. In this instance, the rally from 1.3360 would end up as an a-b-c rally with the rally from 1.3450 unfolding as wave c (and in 5 waves). Even in this bearish alternate count, we expect a new high above 1.3684 before a reversal. The 78.6% at 1.3747 is a potential reversal point.

Strategy: Remain bullish, move risk to 1.3540 (from 1.3450), target hit at 1.3620, second target is at 1.3730

Japanese Yen To See 117.80
Commentary: We wrote yesterday that “former support at 117.20 may now be resistance.” The high put in on Thursday at 117.12 remains intact but the decline since then is corrective, suggesting that one more high will be registered. 117.89 is a likely reversal point. This is the confluence of the 50% of 124.13-111.59 / 100% extension of 111.59-115.50/1113.98. We will be looking for a top and reversal near that point.

Strategy: Look for a top and reversal near 117.90

British Pound Near Reversal Point
Commentary: We wrote last week that “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).” The pair has tested this level and Cable is in a potential reversal zone. 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 near current levels, which is 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.

Strategy: Bullish targets hit (flat)

Swiss Franc Bullish (USD/CHF Bearish) Below 1.2111
Commentary: As continues to be the case, rallies have unfolded in 3 waves at varying degrees of trend, indicating to us that the larger trend is down. A break below 1.1990 instills confidence in the bearish case and gives scope to a test of the 8/6 low at 1.1815. The first bearish target is the 161.8% extension of 1.2215-1.1993/1.2111 at 1.1753.

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 Challenges 1.0500
Commentary: We wrote last week to “look for a test of 1.0340 if 1.0531 gives way.” We continue to look lower as the USDCAD has dropped below 1.0500. The 100% extension of 1.0866-1.0530/1.0666 is at 1.0331, close to the 7/24 low of 1.0340. This is an intial bearish target. The bearish case is strong as long as price is below 1.0666. 1.0571 is near term resistance.

Strategy: Remain Bearish against 1.0666, target 1.0340

Australian Dollar .8412 Potential Reversal Point
Commentary: The AUDUSD looks similar to cable in that the decline from the top (.8870) is in 3 waves. 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). We wrote last week that “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.” The Aussie is may very well challenge this level in the next few days. We will be looking for a top and reversal near there.

Strategy: Looking for a top and reversal near .8410

New Zealand Dollar Testing Resistance
Commentary: Kiwi is in a similar situation (compare to the Aussie). Last week, we wrote that “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.” The high in the NZDUSD today was at .7271, which is the 100% extension. A small 5 waves down would indicate bearish potential. For now, there is no evidence of a top.

Strategy: Flat

Jamie Saettele is a Technical Currency Analyst for FXCM.