EUR/USD - With the low at 1.2040 it looks like blue wave 5 and red wave 3 is in place (see the upper daily chart). We should now be looking for red wave 4. As red wave 2 was a sharp Zig-zag correction, that retraced a great part of red wave 1 we should expect a shallow, but complex red wave 4. From a time perspective we should expect it to take more than 12 days and price-wise we should expect the correction to retrace between 38.2% - 50% of red wave 3, which means we should see red wave 4 correct into the 1.2556 - 1.2715 area. A correction close to 1.2715 will also take us close to the top of blue wave 4, which is the wave 4 of one lessor degree and is a very common target.
What shape should red wave 4 ideally take? I will expect some kind of flat correction.
USD/CAD - Lately I have looked at both Aussie and the Kiwi dollar, so it should be time to look at the CAD or "Loonie" as it's also called.
I do think we saw an important long term low way back in mid-November 2007 at 0.9056 the following rally to 1.3063 is best labeled as wave
1 or A From 1.3063 we saw a very deep wave
2 or B down to 0.9403, which means that wave
2 or B corrected more than 91% of wave
1 or A.Since the 0.9403 low we most likely have see wave 1 and 2 of wave
3 or C and we are now in the very early part of wave iii of 3 and once this wave really gets going it should be a very powerful and dynamic rally towards 1.1834 (1.618 times the length of wave 1) and likely even 1.2316.
From the classic technical school we can see a very nice Shoulder/Head/Shoulder bottom over the last 3 years and a break above the neckline near 1.05 will yield a target near 1.1839 almost exactly the same target as the 1.618 times the length of wave 1.
Short term we most likely have ended minor wave i of iii at 1.0231 and should now see a minor correction back to the 1.0125 - 1.0150 area, before a new rally above 1.2031 and more importantly 1.0249 is seen for a rally towards at least the 1.04 area.
NZD/USD - Has now broken below important support at 0.7857 and we should now see a deeper decline towards 0.7646 and likely even support at 0.7505.
Short term we should look for a reaction back towards former support at 0.7857, which has now become resistance, from where the next decline can begin.
At no point should we break above the top of red wave ii at 0.7922 as that will invalidate my count.
EUR/JPY - As expected we saw one last decline below 94.22 to 94.09, thereby all demands since the 101.62 and even the 111.43 high has been fulfilled and upside pressure should be taking over for a rally above 95.22 towards important resistance near 97.37.
Longer term I'm looking for a rally above resistance at 101.62 towards the 111.43 high.
EUR/NZD - We saw a perfect dip into the target-area between 1.5233 - 1.5265 with a 1.5261 low, which was followed by a quick rally above 1.5398 confirming that the next rally higher towards at least 1.5527 and more likely the 1.5805 - 1.5885 area is under way.
Dow Jones Industrial Index - Finished a five wave decline from the 12.977 high, which is a good sign that wave 2 is finished and wave 3 down to 10,865 is taking over. Short term we need to allow for a minor correction back towards the 12,752 - 12,810 area before the next real downside pressure takes over.
Crude Oil - The correction from 77.28 seems to be over and we have seen the first minor wave to the downside reaching 87.43. We should now allow for a minor corrective wave towards the 90.27 - 90.88 area before the next real downside pressure takes over for a decline down to at least 81.23 and likely even closer to 75.66 on the way to the ideal target near 72.00.
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