US Dollar Index: Corrective forces at play. If our assumption of a fifth wave (of the rise from the May low point, 78.91) peak in place is right then one should prepare for the largest setback since this trend begun. The ultimate target for a more profound setback will be the low point for the circled wave 4, i.e. 84.47 (from where the long term bull trend is seen resuming). The bearish key day reversal set Friday (together with a bullish break in the € index) also suggests relief rallies in commodities.
EUR/USD: The correction is getting legs. After a temporary dip below 1.2419 the buyers took control pushing the pair sharply higher and by doing so in a clearly impulsive manner confirming the next step higher. Our primary target for this correction higher is the 1.28/29-area (where 1.2888 marks the ideal target point as being the wave 4 peak and the start of the 5th wave falling wedge). For today a minor setback likely to attract renewed buying in the 1.2510/20-area.
USD/JPY: An attempt to put a top in place. After having achieved both our targets on Friday the market tried but failed to kick off a downside correction. However after a new, and this time impulsively rejected, top we have exited the rising wedge (ending pattern) to the downside. The sell signal will be extra interesting if ending today below 115.72 thus creating a bearish key day reversal. If the correction case plays out according to the textbook 113.86 will be a firsthand target.
Gold: Starts looking near-term really bullish. In the short-term timeframe perspective price action starts looking bullishly productive. If also breaking a 1,193-1,206 resistance zone a bullish impulse should unfold, targeting 1,222 En Route the Oct high of 1,255 and a 261.8% Fibo projection ref at 1,258. Support likely at 1,184-1,176. Below 1,146 is NOT wanted to maintain a bullish stance.
