We weren’t willing to commit to the idea that EURUSD had topped last week, but we are now. It appears there’s been a perfect reversal from the resistance are we identified long ago (red horizontal line). Unless prices push past last week’s high, we’re aggressively bearish. Notice that into last week’s top, we did see bearish divergence from just below Sustainable Bull territory – that’s a plus for our bearish view. Of course, one more small wave down will likely complete a five wave decline from the top, so next week seems likely to see an early week decline followed by a bounce in wave (ii).
The near term pattern isn’t as clear here, but the bigger picture is still pointed down. Wave (4) could be taking the shape of a triangle, which is our best alternate. But, it’s also possible that the top count is correct, and with prices below down trendlines, and the broken up trendline, there’s no reason to be bullish. The RSI profile is still decidedly negative.
Unlike its European cousins, Aussie is still pushing higher. But, that’s not likely to last long, as evidenced by the five wave nature of the advance, and the harshly diverging RSI from below Sustainable Bull territory (Upper Blue Zone). Wait for a reversal, though, and ideally for prices to break the sharpest up trendline before getting beared up. We’d prefer to use GBP and EUR to play strong dollar themes.
With only three waves down from last week’s high, it seems that NZDUSD still needs one more marginal new high to complete the diagonal. So, it’s in a similar position to AUDUSD, in that, while the larger trend might be down, we have to allow for further upside first.
Well, this is getting ridiculous. Every time it seems we can count five down, the trend persists probing new lows. Fortunately, we’ve yet to put on an actual bullish position, but nonetheless, our expectations for a bounce have proven to be wrong. Yet again, the latest bounce that started Wednesday looks corrective. So, allow for an early week decline, then a bounce to follow. Sound familiar? But, do notice the Sustainable Bear reading on RSI, which does suggest any bounce is likely to be a corrective, and fully retraced. Perhaps this has implications for NZD and AUD over the coming months.
An expanded flat for wave (iv) seems to be complete, although there are other ways to suggest wave (iv) is still underway. Friday’s bearish reversal candle provides a potential turn, and it is the perfect spot to be bearish against. Given RSI couldn’t even get much back out of Sustainable Bear territory, the selling in USDJPY doesn’t appear over.
Corrective up from the low is our top count unless prices push above the down trendline, and especially the wave (i) low. Should that happen look out below for the yen (higher for USDJPY!). We have no doubt that the economic incompetants that run Japan and the BOJ will double down on printing yen. When the next leg higher starts in USDJPY look for something similar to the 2012/13 move – a relentless advance. And, it seems that it may not be on a “risk on” type of a move, but a “helicopter yen” type of rally.
The time zone we reference on our charts is Pacific Standard Time. Therefore, the U.S. cash market opens at 6:30 AM PST and closes at 1:00 PM PST.