EUR/USD - The possible running triangle I described yesterday was invalidated as we did not see a top near 1.2637 followed by a dip in wave e towards the 1.2550 - 1.2565 area, so that left us we strange looking overlapping structure from 1.2465 (expanded ending diagonal), that i have been tracking the last couple of days. With the new high above 1.2637 it's just a question of time before the top of red wave 4 is finally in place. A break back into the small channel I have drawn will indicate underlying weakness, but we will need a break below 1.2561 and more important 1.2501 to confirm that red wave 4 is over and that red wave 5 has taken over for a decline to below 1.2040.
USD/JPY - We saw a nice jump in prices yesterday. The explanation was higher 10Y US yields. I maybe kinda dumb, but believe me I have tried to read over and over, why there should be a relationship between the two, but I simply don't get it... Selling of 10Y US Treasury bonds should weaken the Japanese Yen? If it was because it would make USD stronger I might have bought the explanation, but the other way around... Hmm I just don't get it. Take a look at the chart where I have made USD/JPY overlay TLT (Barclay's 20+Y Bond fund), just to see if this relationship is there. I can't invert the USD/JPY prices, which would have made it a better comparison, but if I had been able to do that, I think it's a far fetch relationship and not something I would be happy to trade on.
However important support at 78.15 has remained untouched, which keeps my bullish count well and alive. That said we still need a break above 79.32 to rule out renewed downside pressure.
GBP/USD - Even though we was able to break above resistance at 1.5912 I still think we are very close to a top. The next possible target I have is at 1.5998, which marks the 70.7% retracement of wave 1 from 1.6301 down to 1.5268.
Yes I took a small loss, but I'm willing to sell again here with a stop at 1.6125, because the downside possibility is huge from here. We have a massive divergence on this last rally, which tells us that this rally is playing its final notes. If you want to play it more conservatively you can wait and sell a break below 1.5825 with a stop just above the top.
EUR/JPY - Has finally made it to the 99.59 target or actually just above, which opens the possibility for a move closer to the 100.60 target, but we are closing in on the top for red wave 5 and black wave 3 and should soon expect black wave 4 to set in for a correction lower towards 98.80 and maybe even the 97.80 - 98.00 area, which should represent a nice buying opportunity for the next rally higher towards the 101.40 - 101.60 area.
EUR/NZD - We have had the first decent correction in a long time here, but we knew that corrections in an extended third wave tend to be sub-normal, which is exactly what we have seen. However buying close to the support at 1.5667 should prove a nice risk/reward opportunity as the rally extends to strong resistance near 1.6200. If you buy near 1.5667 remember your stop at 1.5580.
Gold - Also overshoot its ideal target near 1,700, but here too I do believe we have seen the top or is very close to the top. A break below minor support at 1,685.50 will be the first indication that a top is in place, while a break below 1,645.59 confirms the top for a new decline towards strong support at 1,521.00
Crude Oil - Is still building a top, but here too it should just be a matter of time before we sees a break below 93.95 and more importantly 86.86 to confirm the next decline to below 77.29.
Hi About the usdjpy. What about the idea that we are currently in a triangle currently making the e leg which should end around 79.25 for a strong thrust down to intervention area
ReplyDeleteHi Olu,
ReplyDeleteThat idea is my preferred alternate count. If we had broken below 78.15, that would have been my preferred count and it's an absolute valid count even though we haven't broken below 78.15 yet.
I mentioned that this was my preferred count on September 4 here: http://theelliottwavesufer.blogspot.dk/2012/09/elliott-wave-analysis-of-eurusd-usdjpy_4.html
You probably know, that I have had my concerns over my count and when that happens, the count tends to be wrong, but I just would like some proof like a break below 78.15 but even though we haven't seen that my bullish count is not of the hook yet. In no way!
Yours triangle count is as valid as mine.
Kind regards
EWS
Only a expanding diagonal could do this damage to upside? eur/usd..
ReplyDelete1.28!
Hi Ray,
ReplyDeleteAgreed!
It's a tough ride we are witnessing. We have resistance at 1.2808 and again at 1.2871.
Kind regards
EWS