Strategy: Bullish against 1.4633, Targeting 1.5223
Breaking through the 1.4710 (61.8% of the latest bear wave correction) seems to be just the first step in a new EUR/USD upswing. With 1.50 so tantalizingly close there seems to be simply too much interest not to run it. Like many of my fellow traders, I am positioning for a break above November’s record high. But, unlike the others, I have a more precise objective in mind than just targeting the universally watched 1.50 level. The 138.2% Fibonacci extension of the 11/23 to 12/21 bear wave offers a first target of 1.5223.
EUR/USD
Strategy: Bullish against 1.4633, Targeting 1.5223
Breaking through the 1.4710 (61.8% of the latest bear wave correction) seems to be just the first step in a new EUR/USD upswing. With 1.50 so tantalizingly close there seems to be simply too much interest not to run it. Like many of my fellow traders, I am positioning for a break above November’s record high. But, unlike the others, I have a more precise objective in mind than just targeting the universally watched 1.50 level. The 138.2% Fibonacci extension of the 11/23 to 12/21 bear wave offers a first target of 1.5223.
GBP/USD
Strategy: Flat, awaiting direction from price around 1.9525
Has there been a currency less loved than the pound in the past few moths? The unit has seen a nearly uninterrupted drop from 2.1000 to 1.9500. But, tempting as it may be to follow the trend, my Fib analyses suggests that caution is in order. Cable has not conclusively cleared the 61.8% zone of the 1.8517 - 2.1164 bull wave which may be using the influence of the even 1.95 level to build a bottom. Admittedly, this is an unusual place to pull a Fib retracement with so many viable peaks; but wave happens to pull up the bottom of a thick confluence of levels between 1.96 and 1.95. So for now it’s best to wait and let the price action guide us.
USD/JPY
Strategy: Flat, watching 107.20 as the time fib cycle approaches
Is USDJPY setting up for a double bottom? According to my Fibonacci time analysis, it may do just that. Today’s daily candle marks the next Fib time cycle in the sequence from 11/26's swing low. This sequence has already proven itself to me as the cycle on 12/24 marked the turning point for the pair’s December rally. While market-wide dollar selling has already led USDJPY to drop below the November swing low at 107.20, it will be important to monitor today’s and tomorrow’s closes for clues as to whether USDJPY’s downside momentum can truly be sustained. Until the path is clear, I will remain flat.
USD/CHF
Strategy: Flat, waiting for a fib time cycle and double bottom at 1.0855 to clear
The Swissie represents an interesting conundrum for Fibonacci fans. On the surface the pair appears to be headed lower. But, don’t jump to conclusions so fast my friends. USDCHF now finds itself at a crossroad for both time and price as it must first clear a potential double bottom at 1.0885 while a Fib time cycle ominously passes. Until price confirms a direction, we’ll just have to wait and see.
USD/CAD
Strategy: Bullish against 1.0000, Targeting 1.0455
Having barreled through the 38.2% level of the immense 1.11871 - 0.9050 bear wave, USDCAD looks ready to extend its already considerable retracement. As seems typical in this pair, few obstacles seem to stand in the pair’s way. I remain bullish the pair though a break beyond the broad swing high from 12/14 at 1.0250 will be necessary for my target of 1.0455 - the 50% Fib of the above mentioned, multi-year decline. The nearby risk for my outlook is set back at parity.
AUD/USD
Strategy: Bullish against 0.8874, Targeting 0.9075
Can the Aussie re-test its multi-decade highs? My Fib analysis says yes. AUDUSD has yet to clear fib congestion between 0.9071 and 0.8973, but the rising trend favors a break to the top side. Recently, the pair failed to hold onto a break above the 50% Fib level of the 0.9401 - 0.8554 bear wave; yet I will maintain my bullish bias until risk at the 38.2% Fib of the aforementioned wave at 0.8874 gives way. My ultimate target is merely looking for a double touch of the 23-year high from early November, which is just short of 0.94. However, meeting this objective will depend on whether spot can overtake the 0.9071 in the current upswing.
NZD/USD
Strategy: Bullish against 0.7645, Targeting 0.8150
The kiwi much like the Aussie looks primed to go higher. My Fib analysis shows that if it can clear the range at 0.7834, the next stop on the express train is 0.8150 (138.2% projection of the recent consolidation between 7363-7834. It has tried to break out twice before, but as they say third time is the charm, so I am bullish here against 0.7645 risk.
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