Interesting patterns are emerging on both the world’s most popular currency pair, EUR/USD and on the “antipodean cross”, AUD/NZD.
Here is the analysis from Goldman Sachs:
Here is their view, courtesy of eFXnews:
In both of EUR/USD, and AUD/NZD there are now 5 waves completed across different timeframes, notes Goldman Sachs.
Starting with EUR/USD, GS notes that there are now 5 waves in place since the May ’14 highand as such the current correction could be viewed as a minor 5-wave sequence which started at the Apr. 13th low.
“The minimum target for that 5 th wave comes in at ~1.1395 (1.00 times the length of wave 1). Through that point, the next level higher will be all the way up at 1.1598 (1.618 times the length of wave 1). This latter pivot is particularly interesting as it’s also confluent with the primary downtrend from July which is now at ~1.1626,” GS projects.
“If this is truly a correction, there should be potential to extend higher. The downtrend from Jul. ’14 comes in at 1.1626 and 38.2% of the May/March decline is all the way up at ~1.18…From both a pure techs perspective and in Elliott wave terms, this seems to have potential to be a very big turning point,” GS argues.
Turning to AUD/NZD, GS notes that it has completed a very big 5-wave decline which started in Mar. ’11.
“It has also broken higher from a wedge like decline that formed off the Jan. 29th high. Ending diagonals/wedges are characteristic of 5 th waves which further confirms the theory that a near-to-medium term low may already be in place,” GS adds.
“The long-term wave count implies that the market could eventually retrace ~38.2% of its decline which is all the way up at 1.1095,” GS projects.
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