Euro Close to a Top
Commentary: There is no change in our call for a push to the 1.3750 area and reversal. “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 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 1.3618 (from 1.3540), target hit at 1.3620, second target is at 1.3730

Japanese Yen Pivot 116.25
Commentary: The high put in on Thursday at 117.12 remains intact but the decline since then is corrective to this point, leaving open the possibility that one more high will be registered (above 117.12). 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. However, it is possible that a top is in place at 117.12 as the decline from 116.74 could very well extend. With this in mind, a bearish bias is warranted against 116.25. If the decline does extend, then potential support is at the 8/22 low of 113.98.

Strategy: Bearish against 116.25, target below 111.59

British Pound Same as Euro
Commentary: There is no change from yesterday as Cable remains in virtually the same exact position as the EURUSD. “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.” Look for a reversal lower near current levels.

Strategy: Bullish targets hit (flat)

Swiss Franc Breaks 1.1990
Commentary: We continue to favor the idea that the USDCHF is thrusting lower from a longer term triangle. The decline should extend below 1.1815. “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.” Price has come under 1.1990, therefore we are confident that the near term path is down.

Strategy: Bearish, move risk to 1.2046 (from 1.2215), targets 1.1760 and TBD

Canadian Dollar in Range
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 continues to test 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. Be careful though since the longer term wave structure strongly suggests that a significant bottom is due to form soon. Shorts should keep risk tight.

Strategy: Remain Bearish against 1.0666, target 1.0340

Australian Dollar Topped?
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) and may be close to complete. 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.” We have stated that we will be looking for a top and reversal near there but a top may be in at .8333. This morning’s rally from .8206 to .8278 is clearly in 3 waves (to this point). A break below .8206 warrants bearish action.

Strategy: Sell break of .8206, against .8333, targets .8072 and TBD

New Zealand Dollar Small 5 Waves Down
Commentary: We wrote yesterday 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 yesterday 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.” A small 5 waves down appears to have unfolded from .7272 to .7042 and a correction ended at .7149. Look lower.

Strategy: Bearish now, against .7272, targets TBD

Jamie Saettele is a Technical Currency Analyst for FXCM.