Elliott wave and technical analysis on EUR/USD; USD/JPY; GBP/USD; The VIX Index and DJI

 EUR/USD - The correction from 130.33 became more complex than first anticipated and we have now seen the expected test of next resistance at 132.09 (o/n high was at 132.12). The big question now of cause is, will we see an even more complex correction taking us up to 132.51 before we are ready to resume the downtrend established from 134.85. As long as support at 131.00 stays intact we can't exclude this possibility, but I believe the odds favors that the correction from 130.33 ended at 132.12 and we should be ready to resume the underlying downtrend from 134.85 for a new firm test of neckline support near 130.10, which a break below 131.00 will confirm.

I will be looking for a five wave decline from 132.12 followed by a three wave rally correcting between 50% to 61.8% of a potential five wave decline and use that as a low risk entry point.

 USD/JPY - Hasn't yet broken clearly above resistance at 81.12 and more importantly 81.75, but I still think it's a question of time before the underlying uptrend will resume for a rally above 84.17 towards 85.50.

 GBP/USD - Here too the correction from158.02 became more complex than first anticipated. What looked like a failure break followed by two bearish candles turned out to be a warning of a more complex correction being a work. That is the name of the game, we can only work with the probabilities we think are the best and protect our self when being wrong. The aggressive trade I suggested yesterday had a small loss, while the conservative trader could just lean back and look at the more complex correction unfolding. However having tested resistance at 159.65 (the o/n high was at 159.84) I think the odds favors the downside again and therefore will still looking to play the downside. Short term I would expect resistance in the 159.65 - 159.70 area protecting the upside for a break below 159.30 for a decline towards the neckline resistance near 158.00.

Therefore the aggressive trade will be selling in the 159.65 - 159.70 area with a 160.05 stop or conservatively waiting for a break below 159.30 before selling with the same stop.

 VIX Index - Is headed for the Bollinger Mid-band where we find strong support, which I suspect will protect the downside for the next upside pressure towards 21.85. A clear break below the Mid-band will target the lower Bollinger band, but that is not my favored scenario at this point.

Dow Jones Industrial Index - Is a minor S/H/S top-formation building? It could well be so and if it's the case we should see the right shoulder find resistance near 13,060 for a new challenge of the neckline support at 12.735 and a break here will target support near 12,300.
A clear break above 13,060 will invalidate the possible top-formation and call for a new high above 13,297.