EUR/USD - We have seen a powerful rally to 1.2329, which marks green wave iii and have since the 1.2329 high seen a very small retarcement. This small retracement could be green wave iv (23.6% of green wave iii), This could be all for green wave iii, but as long as resistance at the 1.2329 high protects the upside we should be looking for a slightly deeper correction towards 1.2246 for green wave iv, before we will see green wave v towards either 1.2382 (38.2% of green wave i through green wave iii) or towards 1.2447 (61.8% of green wave i Through green wave iii). This should mark the first leg of the larger correction in red wave iv.
USD/JPY - Has been rather resilient, but I still think we are going to see a rally in wave iii towards either 78.86 or 79.06 as wave iii. I think a rally to 79.06 will be a better fit, but we will have to be pacient and see what unfolds.
At no point can a break below 77.95 be accepted, as that will invalidate the count shown.
GBP/USD - Here I'm still looking for the rally towards resistance at 1.5905, from where renewed downside pressure should be expected.
In the bigger picture we are in the early parts of the downside thrust out of the big B-wave triangle that have been building since January 2009 and calls for a decline below the bottom of wave A at 1.3498.
USD/CAD - Unexpectedly broke below 1.0062, which invalidated the bullish count and calls for a third zig-zag towards 0.9995 and possibly even down to the 0.9920 - 0.9935 area, before wave 2 is finally done for a new powerful rally in wave 3.
NZD/USD - Here too the correction from 0.7797 has become much bigger than expected, but only a break above the 0.8054 high will invalidate the bearish count. It should also be noticed, that black wave ii retraced most of black wave i. That shows us the the Bulls and the Bears is almost equally strong and the tug of fight is not over yet. However a break below 0.7985 will ease the upside pressure, but it will take a break below 0.7916 to confirm that red wave ii is over and a new decline below 0.7797 is in the making.
At the current levels sell NZD ag. USD presents an excellent risk/rewards. Stops can be placed just above 0.8054 and the potential is a move to below 0.7797. You don't get it much better than that.
Trading is all about taking calculated risks, where the risk is as small as possible and the reward is as big as possible and that is clearly the case here where the risk/reward ratio is 1 to 6 and that's just for a decline to 0.7797, if we break below 0.7797 as I expect the reward will be much bigger.
EUR/JPY - The rally from the important 94.09 low has been almost text-book and we should now be looking for green wave iv correcting green wave iii. The ideal target will be the 38.2% of wave iii, which comes in at 95.72 before green wave v takes over towards 96.85 (38.2% of green wave i through green wave iii) and possibly even 97.40 (61.8% of wave i through wave iii).
EUR/NZD - The jury is still out there. Is we close to finish green wave ii and see a sharp rally in green wave iii or will we break below 1.5261 for a deeper wave c of an expanded flat correction in red wave ii? It's all about which point break first. Is it 1.5261 then the expanded flat correction is the correct answer, while a break above 1.5389 while support at 1.5261 has not been broken will call for green wave iii higher towards 1.5570.
Dow Jones Industrial Index - The count shown above is the alternate count to the one I showed in my post here: http://theelliottwavesufer.blogspot.dk/2012/07/elliott-wave-analysis-of-eurusd-usdcad.html
The rally from 12,522 has been quite powerful, but it will take a break above 12,977 to make this count the preferred count, however if we see a break above 12.977 we should see one last rally higher towards 13,023 before the downside pressure returns.
If we don't break above 12.977, but instead break below 12,821 and more importantly 12,725 the preferred count is the right count and should call for a continuation towards at least 12,190.
Gold - Is hoovering just below the wave-c high at 1,624.70. This high should not be broken as that would cast doubt over the B-wave triangle and could cause a rally higher towards resistance at 1.670 (not the preferred picture). Instead look for a break below 1,601 and more importantly 1,580 that would call for a new test of the all important support near 1,521.
Crude Oil - Has entered the target-zone for red wave ii and we should see downside pressure increase as red wave iii takes over for a decline towards at least 81.51. It will take a break above the 92.89 to invalidate the count above.
I would really like to know what would be your prefferred break in usd/cad bullish count . Should I look for a break above 1.0166 to validate that wave 2 has finish or all important 1.0251 confirms that wave 2 is finished. I request you to please post the break above the area should be an indication that prior wave has done. As I am really confusing about Nzd/usd trade.
ReplyDeleteThanks for the post though gbp/usd I would prefering now a break above 1.5737 or I would count it as retrest
Take care thanks for the explanation both sterling and loonie
Hi Aman Arora,
ReplyDeleteRegarding USD/CAD a break above 101.66 will not confirm that wave 2 is over.
The decline from 1.0231 does look impulsive in its structure, which is why I'm looking for a thrid zig-zag correction to take place. Once this thrid zig-zag is done there can not come any more as a triple-correction is the maximum,so if you are asking how you could trade USD/CAD here is how I would do it.
Currently we are in wave b of the thrid zig-zag, which should be followed by a new turn to the downside for a move down to the 0.9920 - 0.9935. I would buy USD ag. CAD just infront for this target-area with a stop at 0.9796.
The conservative play will be wait for the downside to play itself out and wait for a break above 1.0249 as a break above here will signal that wave 2 is finished.
Regarding NZD/USD the break above 0.8054 has confirmed that the decline since 0.8074 was corrective (three waves)- Likely an X-wave and we should expect a new high above 0.8074. I would now expect a move closer to 0.8173, but I need to see how the waves unfold to say more.
Even though resistance at 0.8054 has been broken, you should expect a minor top soon follwed by a corrective decline towards 0.7950 before the last rally higher sets in.
Hope this helps you.
Kind regards
EWS
Thanks for the update. regarding usd/cad I sold a small portion around 1.0110 with stop arouond 1.0170 for the final leg because I was looking for the wave B to rise towards 1.0150 but it hold around 1.0110 so I am looking for parity atleast to close my trade and bag some profits and after that I will see how it react . But hats off too you who predict the last rally of dow towards 13029 area even if it has gone bit higher.
DeleteBut as far as eur/yen is concerned you were spot on. But eur/nzd I am bit confused because even though it is a very complex part of bottom Do you expect a last rally towards 1.5120 area because nzd/usd is in such a strong swing it can happen. But after all trading exotic currencies is too much risk But I would like to see bottom and rally towards 1.5900 area as it happened in Natural Gas and eur/yen when you were spot on and 300 pips rally after and lot of potential still with usd/yen breaking out after a week and good us GDP as expected.
Thanks a Lot
Looking forwards for your reply
I always turn to your view on the DOW when things get too happy on Wall St. I see your revision had hit almost exact to the blow off top of 13,075 we had today. Do you have an apx timeline as to when you think the decline would start in the DOW?, as these massive rallies usually end with quite a reversal not too long after. Thank you as always
ReplyDelete