First of all, please see my last post regarding USD/JPY: http://theelliottwavesufer.blogspot.com/2011/04/usdjpy-wave-1-is-likely-over.html As I metioned in that post (add-on to the original post), that we could expect one more rally in wave 1, which is what we have got. Where will this last rally end? First of all we have the long term trendline resistance at 85.62. Looking at the Fibo-relationships at 85.72 wave v of 1 will be equal to wave 1 - 3 in length. and finally we have resistance from at 85.84 - 85.92 which was the top in mid-September 2010. When wave 1 is done I will be looking for a deep retacement in wave 2. Ideally wave 2 will correct towards 80.45 area (61.8% retracement of wave 1).
On a different note, AUD seems to be in the 5th Wave if take Jan 2009 as Wave 1 and Apr 2010 as Wave 3? I wonder whether within the month or two it will finally be topping. Such a schedule would fit well with an upcoming end of QE2 in early June. What is your opinion?
ReplyDeleteHi EWS,
ReplyDeleteWhat do you think about Wave 5 of Wave 1 in usd/jpy having a microwave count as follows:
Wave 1 80.86-83.20
Wave 2 83.20-82.56
Wave 3 82.56-84.72
Wave 4 84.72-83.85
Wave 5 83.85-?
So, if this is the case, if we get lower than 84.72, what would you think about a short be entered? I value your opinion. Thanks for your time.
Hi FX Trader,
ReplyDeleteI agree with you on you AUD count. I too see the current rally as a wave 5 in the rise from Jan 2009. I'm would find it strange if it took a month or two more before topping, but within that time-frame we could see wave 1 and 2 form. Again I would believe that the financial markets have discounted the end of QE2 before the actual fact.
Regards
EWS
Hi John,
ReplyDeleteAs long as we don't break above 85.99 the count could work (wave 3 is not allowed to be the shortest). What I don't like about your count is, that wave ii and iv of wave 1 is bigger than wave 2 and wave 4. I will not say it couldn't happen, but I don't think it will give the wave-structure the right look.
If you look at the MACD-indicator you will normally see the peak of wave 3 also be the peak in the MACD (MACD peaks at 81.98) from there it's just divergence
Shorting is absolutely an option. In my view the aggressive strategy would be shorting near 85.80 (why 85.80 you might ask. The reason why I suggest that level is, that at 85.86 wave 5 would be equal in length to wave 1 though 3)with an 86.50 stop, while the safe strategy would be to sell on a break below 84.57 with a stop just above the top.
Regards
EWS