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Tuesday, August 14, 2012

Elliott Wave analysis of EUR/USD; NZD/USD; EUR/JPY; EUR/NZD and VIX/Dow Jones Industrial

 EUR/USD - The best fit still seems to be, that we have seen an X-wave from the 1.2443 high down to 1.2241 and we could now be headed towards 1.2550. However as I said yesterday we are in the part of the correction from the 1.2040 low, that is the most difficult to read and where the "visibility" is the lowest. That said don't loose sight of this only being a correction (red wave 4), which should be followed by a new decline towards 1.1845 and maybe even lower, but we will know more about that when we know where red wave 4 ended.
 NZD/USD - Is most likely is an expanded flat correction, but we should still see an attempt to reach resistance at 0.8160. The fact that the low of wave i was broken just tells us, that the bearish forces are in control and we should expect a dynamic and powerful decline once this correction is over. After the correction my first target is still near 0.7850.
 EUR/JPY - We still need a break above minor resistance at 97.28 to confirm that red wave 3 is under way towards 100.28 and likely even 101.50. As long as minor resistance at 97.28 protects the upside a new decline towards 95.71 can't be excluded.
 EUR/NZD - The failure to break below minor support at 1.5084 has made the series of one's and two's the preferred count and we should soon a continuation higher towards 1.5440 in blue wave iii.

VIX Index and Dow Jones Industrial Index: Continued lower despite a very lackluster day for the stock-markets. That most likely indicates that we will see one more rally higher towards 13,318 as the first target. We might even see a break above the May 1. high at 13,338.66 for a move towards 13,381.70, which will change my count, but non the less I still regard this rally as part of a larger correction that began all the way back in May 2011 at the 12,840.66 high. However once this rally is over we should expect a new powerful decline, but don't expect Armageddon...

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