EUR/USD - The possible running triangle I described yesterday was invalidated as we did not see a top near 1.2637 followed by a dip in wave e towards the 1.2550 - 1.2565 area, so that left us we strange looking overlapping structure from 1.2465 (expanded ending diagonal), that i have been tracking the last couple of days. With the new high above 1.2637 it's just a question of time before the top of red wave 4 is finally in place. A break back into the small channel I have drawn will indicate underlying weakness, but we will need a break below 1.2561 and more important 1.2501 to confirm that red wave 4 is over and that red wave 5 has taken over for a decline to below 1.2040.
USD/JPY - We saw a nice jump in prices yesterday. The explanation was higher 10Y US yields. I maybe kinda dumb, but believe me I have tried to read over and over, why there should be a relationship between the two, but I simply don't get it... Selling of 10Y US Treasury bonds should weaken the Japanese Yen? If it was because it would make USD stronger I might have bought the explanation, but the other way around... Hmm I just don't get it. Take a look at the chart where I have made USD/JPY overlay TLT (Barclay's 20+Y Bond fund), just to see if this relationship is there. I can't invert the USD/JPY prices, which would have made it a better comparison, but if I had been able to do that, I think it's a far fetch relationship and not something I would be happy to trade on.
However important support at 78.15 has remained untouched, which keeps my bullish count well and alive. That said we still need a break above 79.32 to rule out renewed downside pressure.
GBP/USD - Even though we was able to break above resistance at 1.5912 I still think we are very close to a top. The next possible target I have is at 1.5998, which marks the 70.7% retracement of wave 1 from 1.6301 down to 1.5268.
Yes I took a small loss, but I'm willing to sell again here with a stop at 1.6125, because the downside possibility is huge from here. We have a massive divergence on this last rally, which tells us that this rally is playing its final notes. If you want to play it more conservatively you can wait and sell a break below 1.5825 with a stop just above the top.
EUR/JPY - Has finally made it to the 99.59 target or actually just above, which opens the possibility for a move closer to the 100.60 target, but we are closing in on the top for red wave 5 and black wave 3 and should soon expect black wave 4 to set in for a correction lower towards 98.80 and maybe even the 97.80 - 98.00 area, which should represent a nice buying opportunity for the next rally higher towards the 101.40 - 101.60 area.
EUR/NZD - We have had the first decent correction in a long time here, but we knew that corrections in an extended third wave tend to be sub-normal, which is exactly what we have seen. However buying close to the support at 1.5667 should prove a nice risk/reward opportunity as the rally extends to strong resistance near 1.6200. If you buy near 1.5667 remember your stop at 1.5580.
Gold - Also overshoot its ideal target near 1,700, but here too I do believe we have seen the top or is very close to the top. A break below minor support at 1,685.50 will be the first indication that a top is in place, while a break below 1,645.59 confirms the top for a new decline towards strong support at 1,521.00
Crude Oil - Is still building a top, but here too it should just be a matter of time before we sees a break below 93.95 and more importantly 86.86 to confirm the next decline to below 77.29.
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