Ski vacation in Austria.

It's time for my yearly ski vacation in Austria.

Take care and trade safely, while I'm away.

I will speak to you again on Sunday February the 3rd.

Elliott wave analysis of EUR/USD; EUR/JPY; DJI; Gold and Crude Oil

 EUR/USD

Continues to rally higher as expected. We have now tested the minimum target near 1.3485, but I do expect a continuation higher towards 1.3792, where wave C will be equal in length to wave A. That said, we must accept a move even higher closer to 1.4200 before wave E of the large triangle terminates.

 EUR/JPY

The strong rally above 121.28 and more importantly 121.75 does call for a continuation higher towards 1.2452, where wave v of 3 will be 0.382 times the length of the rally from the bottom of wave i of 3 to the top of wave iii of 3.
That said, we should remember that we will encounter strong resistance at 123.27, which was the top back in April 2011.

 Dow Jones Industrial Index.

Continues to move higher, but we will see a break above important resistance at 14,093? Taken into consideration, that we are extremely overbought, that the VIX is at a 17 month low and the leverage is at an all time high. I doubt that we will see a break, but if we do, then the ending diagonal is not a valid count and we must accept a new all time high. However, I find it more likely that a deep correction is looming and could be initiated at any time now. A break below 13.778 will be the first indication, that a top is in place, while a break below 13.365 is needed to confirm the top.

 Gold

The failure to break above resistance at 1,695 is disappointing in regards to the bullish count. The failure raises the risk of a deeper decline towards strong support at 1,527 before the next rally can be expected. Only a direct break above minor resistance at 1.695 eases the downside pressure and indicates a rally higher towards strong resistance at 1,796

Crude Oil

Is still headed towards strong resistance near 105.00. It's still undecided whether we have seen a finished triangle or the rally towards 105 only finishes wave D and one more decline in wave E later on, but for now we should stay focused towards the upside and a test of resistance near 105.00.

Elliott wave analysis of Apple

Apple

With the clear break below the 38.2% corrective target at 464.86 I will be looking for a continuation down to the 50% corrective target near 391.00 as the ideal target for this correction.
The target for the ongoing wave iii of C is at 407.49 and after a wave iv correction higher towards 464 we should see the final decline down to 391.00.

Elliott wave analysis of EUR/JPY and EUR/NZD

 EUR/JPY

The powerful rally yesterday clearly showed us, that we where looking at a wave iv correction and that one more new high was needed. We have already seen this new high with the test of 121.30, which is just two small pips above our ideal target. So we could have the top of wave 3 in place with the test of 121.30, but to confirm that we need a decline below 120.08 and more importantly a break below 119.25. That said we know, that we are getting close to the top of wave 3 if have not seen it already. However, as long as we have not seen a break below 120.08 we must accept the risk of a move a little higher towards the 121.66 - 121.77 area before the top is finally in place. What can we expect from the coming wave 4. The absolute minimum would be a 23.6% correction down to 116.35, while a more normal correction would take us down to the 38.2% corrective target at 113.29. Time will show us which target is the correct one. 

EUR/NZD

With the break above minor resistance at 1.5836 and more importantly the break above resistance at 1.5855 we knew that the expanded flat correction had finished already with the low at 1.5750 and that the blue wave iii higher had already begun. The first target for this blue wave iii is at 1.6054, but we expect this blue wave iii to extend, which calls for a continuation higher towards 1.6218 and more likely 1.6500 before blue wave iii is likely over. Short term we can expect support at 1.5930, which will ideal protect the downside for the next rally higher towards 1.6054. However if we see a break below 1.5930 we must allow for a decline to 1.5904 before the next move higher. At no point should we see a decline below 1.5836 as that would leave us with a none impulsive move up from 1.5750.

Elliott wave analysis of EUR/JPY and EUR/NZD

 EUR/JPY

The rising channel is still intact, which means we still have two possible options at this point. The first is, that a more complex wave iv correction is ongoing from 120.12 and will be resolved in on final rally higher towards the ideal target at 121.28. Secondly we could already have seen wave 3 end at 120.71 (just below the ideal target at 121.28) and wave 4 is ongoing. This wave 4 will likely take us down to 113.54, which marks the bottom of wave four of one lessor degree. At this stage it is impossible to say which option is the correct one. However. We have to remember that we are in the final parts of wave 3 and even if we see one more rally higher towards 121.28. we are pretty close to a top. Short term we expect support at 118.35 will protect the downside for a test of the 119.40 - 119.50 area, before some real downside pressure takes over again.

EUR/NZD

We are still looking for one last decline towards our target at 1.5703 as long as minor resistance at 1.5836 and more importantly minor resistance at 1.5855 protects the upside. From support at 1.5703 or upon a break above resistance at 1.5836 we will be looking for the next strong and impulsive rally towards the top at 1.6218 and higher towards 1.6500. Expanded flat corrections normally indicates, that the following impulsive wave will be an extended wave, which in this case means a rally higher to at least 1.6500, where blue wave iii will be 1.618 times longer than blue wave i. However, for now we are still looking for one last decline down to 1.5703 as long as minor resistance at 1.5836 stays unbroken.

Elliott wave analysis of EUR/JPY and EUR/NZD

EUR/JPY

With the break below minor support at 118.20 yesterday, the short term picture has become very cloudy. We are still rising within the channel, which is positive. However, the break below 118.20 made the possible wave iv of 5 overlap wave i of 5, which is not allowed under the Elliott Wave Principle. Therefore we have two options at this point. The first is, that the correction from 120.12 still is ongoing, in some very complex wave 4 correction and we still need one more rally higher once complete. Secondly we could have seen the top of wave 3 already at 120.71 (a little short from the ideal target at 121.28). If we already have seen the top of wave 3 we are now looking at wave 4, which should decline down to the bottom of the wave four of one lessor degree, which means a decline to 113.54.

EUR/NZD

As we saw a break below 1.5780 yesterday, my 1-2/1-2 count was invalidated and it seems as a more complex correction in form of an expanded flat correction is ongoing from the 1.5977 high. If this is the case we should see a continuation lower towards at least 1.5703 before blue wave ii is finally over. Short term minor support at 1.5869 should protect the upside for a break below 1.5811 and more importantly a break below 1.5771, which confirms the decline towards 1.5703. However, a break above 1.5869 will call for a move closer to 1.5907 before down.

Elliott wave analysis on EUR/JPY and EUR/NZD

EUR/JPY

 

The wave iv correction from 120.71 should be over and we are now looking for a rally past minor resistance at 120.24 to confirm that assumption for the last rally higher towards 120.71 and the ideal target near 121.28. That said, we should be aware, that the hole impulsive rally from 100.32 is coming to and end and a much bigger correction is looming. The coming wave 4 correction should at least give us a correction down to 113.54, which marks the bottom of wave four of a lessor degree. This is a very common target and will at the same time be very close to the 38.2% Fibonacci target. However, for now we should keep focus towards the upside for one last rally higher.



EUR/NZD

 

We have likely seen the bottom of green wave ii at 1.5813 and we are now looking for a break above 1.5907 as the first indication. that the bottom is in place. However, we will need a break above 1.5947 to confirm that bottom and to confirm the next rally higher towards 1.6054 and beyond towards 1.6267. As long as minor resistance at 1.5907 protects the upside we must allow for a little more downside, but we can not go below 1.5780 under any circumstance, as that would invalidate our count and call for a decline to at least 1.5703.



Elliott wave analysis of EUR/JPY and EUR/NZD

EUR/JPY

 

The correction from 120.28 became a little deeper than I expected, but it has not changed My view in any way. I regard the decline from 120.28 down to 119.07 as wave iv of 5 and we should soon see way v of 5 move higher through 120.28 for a rally towards the ideal target near 121.28. However, once we reach the target near 121.28 we should expect a big correction down to the 113.54 - 116.00 area, where we find the wave four of one lessor degree. This would be the first target-zone we will look for the expected wave 4 to end. However, we will have more clues once wave 3 finally ends and we can calculate the Fibonacci retracement targets, but for now we should stay focused towards the upside for one last rally higher towards 121.28.

 



EUR/NZD

 

After the test of 1.5889, which I have marked as green wave ii we should be ready for the next rally higher towards 1.6054 and beyond towards the next target at 1.6267 and possibly even higher towards 1.6545. Short term a break above 1.5964 will be the first clue, that green wave ii is indeed over and green wave iii higher is developing. However, as long as minor resistance at 1.5964 protect the upside we must allow for a new test close to the 1.5889 bottom and maybe even slightly low towards 1.5865, but we will likely not see anything lower than that.

 



Elliott wave analysis of EUR/USD; DJI; Gold and Crude Oil

EUR/USD

 

Since my last update on EUR/USD we have seen support at 1.2973 protect the downside to perfection and the following rally have made new highs in accordance with my expectation of a move to minimum 1.3498 and likely even higher towards 1.3838, where wave e will have corrected 61.8% of wave d. That said we should not forget, that this rally could continue all the way towards the triangle resistance line near 1.4600.

 

Dow Jones Industrial Index

 

It has been quite a while since I have posted anything on the DJI, but it has not been the most interesting Market in my view. However, lets take a look at it. First of all I would like to draw the attention to the indicators below. Both the RSI and the ROC both displays a possible divergence building. This is not what should be expected if we are looking at a new major upswing. That said, we should be aware that a sudden acceleration towards the upside could cause both indicators to rise dynamically and confirm the ongoing rally.

 

Looking at the price action itself it doesn't look impulsive to me and rather looks like an Ending Diagonal is developing. If this is the case we can not allow a break above 14,093 as that will leave us with wave c as the smallest wave, which is not allowed under the EWP. That doesn't leave us with much more upside, but we need to see a break below 13,293 and more importantly a break below 12,884 to confirm the top and a decline towards the 10,651 area.

However a break above 14,093 will call for a continuation higher towards 16,138 in a very large broadening formation.

 



Gold

 

Has most likely ended its wave ii, which means a new test of important resistance at 1,802 is developing. However, we need a break above this strong resistance to confirm the next rally higher towards the first possible target for wave 5 near 1,998.00

When dealing with commodities they often end in some kind of moon-shot rally, which easily could be the case here too. If this will be the case we should look for a rally much higher than the 1,998.00 target, more like a rally towards 2,558.00 and maybe even towards 3,195.45 if wave 5 becomes extended, but only time can tell.

 



Crude Oil

 

Has clearly broken higher and we should now look for a rally higher towards 103.80 as the first target, where we will find strong resistance. If however this resistance gets broken too the we can expect a move much higher towards the 2008 top at 147.27. The other possibility is, that we only are looking at wave D of the triangle and from 103.80 we can expect a decline in wave E towards support near the 85 - 87 area before the next rally takes place. But for now we should focus our attention towards resistance at 103.80.

I would also like to point out, As we are in the later part of a big Triangle the price-action can become pretty erratic and very difficult to read and trade.

Elliott wave analysis of EUR/JPY and EUR/NZD

EUR/JPY

 

We never had any follow-through towards the downside yesterday, instead we saw a break above the former top at 120.12. This break above resistance at 120.12 reinstates the uptrend for a possible move towards the next targets at 121.28 and then 121.74. Short term I would like minor support at 119.79 to protect the downside for the move towards 121.28. That said the very quick decline from 120.12 to 116.63 is not in accordance with my previous count and looks more like a part of wave 3 up from 100.32, that means we still have wave 4 to look for, but first we have to concentrate on the ongoing wave 3 and trying to determine the most likely termination point, which seems to be in the 121.28 - 121.74 area.

 



EUR/NZD

 

My call for the termination of blue wave ii was correct and we should now see a very powerful move towards the upside as blue wave iii develops. The first target for blue wave iii is at 1.6267, where blue wave iii will be equal in length to blue wave i, but normally I would expect an extension in wave three, which would call for blue wave iii to rally even higher towards 1.6542. We will of cause have to wait and see how this rally unfolds. Short term I will look for support at 1.5946 to protect the downside for the next rally higher.



Elliott wave analysis of EUR/JPY and EUR/NZD

EUR/JPY

 

The 4-wave correction is developing nicely. Wave A of the simple zig-zag correction, that we are looking for ended at 116.47 and was followed by a minimum length wave B. This wave B only corrected 38.2% of wave a and ended at 118.20. With wave A and B in place we can calculate the most likely ending point for wave C, which is at 114.57, where wave C with equal wave A in length. Normally we expect wave 4 to be complex in its structure, but as we had a big flat wave 2, we expect wave 4 to be a simple zig-zag correction due to the Elliott Wave Principle of alternation. Once this wave 4 is over we are looking for the final move higher in the sequence from 94.10. The first target for this wave final wave is at 124.55, if we do see wave 4 ending at 114.57.

 



EUR/NZD

 

I do think that blue wave ii have terminated or is very close to terminate, however a break above 1.5868 is needed to confirm that for the next rally higher towards resistance at 1.5977, which should be broken without much trouble next time, for a continuation higher towards 1.6267, which is the minimum target for blue wave iii. That said, as long as minor resistance at 1.5868 is protecting the upside, there is a risk of a slightly deeper correction towards 1.5742 before this blue wave ii correction finally terminates and blue wave iii takes over.  

Elliott wave analysis of EUR/JPY and EUR/NZD

EUR/JPY

 

With the break below important support at 117.65 we where given the signal, that wave 3 ended at 120.12 and wave 4 is developing. So what can we expect from the ongoing wave 4? Wave 4 is correcting wave 3 and as wave 3 was an extended wave we should not be looking for a correction deeper than the 38.2% correction target, which comes in at 112.56. I normally expect wave 4 to alternate from wave 2, so looking at wave 2 we can see, that it was a big flat correction, which means wave 4 will likely be a simple zig-zag correction. Zig-zag correction is made up of three waves A-B and C, where wave A and C are in five waves and wave B corrects wave A and is in three waves. The decline from 120.12 can be counted in five waves, which means, that wave A already is finished or is very close to its bottom and wave B should take us up to at least 118.49 and likely even to 118.72, where we will find the 61.8% correction target of wave A. Once wave B is over we can calculate the targets for wave C with the first likely target coming in at 115.45.

EUR/NZD

 

As minor resistance at 1.5926 protected the upside for a break below 1.5837 I was now looking for a more normal correction towards 1.5797, which already has been tested. That means we could have seen the bottom of blue wave ii. If blue wave ii have finished we should soon see a break above 1.5858 and more importantly a break above 1.5926 for a new rally above 1.5977 towards at least 1.6267 and likely even higher towards 1.6559, where blue wave iii will be 1.618 times longer than blue wave i. Short term the risk is, that minor resistance at 1.5858 protects the upside for an even deeper correction towards 1.5749 and maybe down to the 61.8% correction target at 1.5686 if wave c of blue wave ii extends.

Elliott wave analysis of EUR/JPY and EUR/NZD

EUR/JPY

 

After a small correction from the 120.12 high down to 118.56, I'm looking for the next rally higher towards the ideal target-area between 121.18 - 121.34 where I expect wave 3 to terminate and wave 4 to begin. A break above 119.17 will be the first indication, that we are headed higher towards 120.12 and 121.18, while a break above 119.42 confirms the rally to 120.12 and higher. The risk is a break below 118.56 and more importantly a break below 117.63 as that will indicate, that we already have seen the top of wave 3 and wave 4 is ongoing, for a correction towards at least 115.99 and likely even down to 113.55.

 



EUR/NZD

 

The correction from the 1.5977 high became slightly deeper than I expected with the test of 1.5837, but it's still a very small correction with sub-normal characters. I'm now looking for a break above minor resistance at 1.5926, which will confirm a new rally higher to 1.5977 towards the next targets at 1.6087 and at 1.6217. Longer term I'm looking for much higher levels. Short term the risk is a break below 1.5837, which will call for a deeper and more normal correction towards 1.5797 and maybe even down to 1.5747 before the next rally higher can be expected. 

Elliott wave analysis of EUR/USD and Gold

EUR/USD

 

With the clear break above resistance at 1.3300 we are headed towards my first target at 1.3491, but I will not be surprised to see a continuation higher towards the next target at 1.3833.

Not only will wave C be equal in length to wave A at 1.3833, but it also marke the 61.8% retracement target of the decline from 1.4940 down to 1.2042. That said, we must be aware of the possibility for a continuation higher towards the triangle resistance-line. Time will show how high we will go.

 



Gold

 

It has been quite a while since I have last written about gold, but I do think there is a very good chance, that we have seen the bottom of wave ii of 5 at 1,625.94 and wave iii is under way higher towards 1,998.05. To confirm the rally higher we first of all need a break above 1,712.35 and more importantly a break above 1,754.31, which confirms a new test of strong resistance at 1,795.90. If resistance at 1,795.90 is broken we will likely see a powerful rise towards the target at 1,998.05.

Elliott wave analysis of Apple and Facebook

 

Apple

 

Is ready for the next part for the correction. A close below support at 505 confirms a continuation down to at least 463.64, but a more likely target is at 407.25 before wave iii of C is done. My long term target for this wave 4 is at 391.03, where wave 4 will have corrected 50% of wave 3.

  

Facebook

 

In my last post (http://theelliottwavesufer.blogspot.dk/2013/01/elliott-wave-analysis-of-facebook-wave.html) I said, that we would likely see a slightly new high above the ideal target at 31.28. With a new high at 32.26, that has been exactly the case, but the powerful decline from 32.26 indicates, that wave 4 is now under way. The first target for this wave 4 correction is at 29.12, but I would be very surprised if this support will be able to protect the downside. I find it much more likely that this wave 4 correction will be deeper and should at least decline to 27.18 and possibly even down to 25.61 before the final leg higher in wave 5.

Elliott wave analysis on EUR/JPY and EUR/NZD

 

EUR/JPY

 

With the clear break above 119.50 we should focus on the next target for wave v of 3, which will be in the area of 121.18 - 121.34. As we are getting close to the possible top of wave 3 we should also be careful not to think, that this rally will just keep on going higher and higher, the first warning, that we have seen the top of wave 3 will be a break below 118.57 and more importantly a break below 117.63, which will call for a flat correction in wave 4 down to at least 115.99 and more likely down to 113.55. But for now we should stay focused towards the upside for a move higher towards the ideal target area between 121.18 - 121.34.



EUR/NZD

 

The warning from the "Hidden Divergence" did a perfect job, in telling us that this rally would become very powerful. We are already back at the middle of the base channel, but I'm not sure, that there will be time for a prober correction before the next move higher. The risk is we will only see a minor correction down to 1.5912 and maybe down to 1.5879 before the next move higher towards 1.6087 and 1.6217. Longer term I'm looking for a rally higher towards 1.6772, a target that will be confirmed once resistance at 1.6217 is broken.

 

Elliott wave analysis on GBP/USD - Bullish and Bearish case

 

GBP/USD - Bullish Scenario

 

I have for some time now present the above scenario as my preferred count. I still think this is the best way to describe the price-action all the way back to 1971.

 

That means we are likely in a B-wave triangle, which ultimately will break towards the upside for a huge rally towards at least 1.8800 before the next decline sets in.

It has been very difficult to decipher the price-action since mid-2012, the reason for that might be because an E-wave triangle has developed or still is developing, but once this E-wave triangle is finished we should see a powerful thrust out of the triangle towards the upside.

A close above the triangle resistance line at 1.6301 will indicate, that the triangle is finished and the thrust higher is underway.



 

GBP/USD - Bearish Scenario

 

I have worked with this option too, until I took a view on the long term count a changed my preferred count to the above. However, the bearish count is a valid count until a break above 1.6747 confirms the bullish count as the correct count. On the other hand a break below the triangle support line at 1.5745 and more importantly a break below 1.5268 will confirm the bearish scenario and call for a decline to below 1.3514. As long as we are within the triangle boundaries the price-action will be rather erratic and trades should only be taken close to the support- or resistance line with as close stops as possible. 

Elliott wave analysis of EUR/JPY and EUR/NZD

EUR/JPY

 

There was no time for even a minor set-back yesterday. With the clear break above 115.55 we had the signal, that an important bottom was in place at 113.55 and the next rally higher had begun. Breaking above the former high at 115.99 was no problem at all and even our next target at 117.90 was broken without any trouble, which makes me conclude that this powerful rally has much more upside to cover. Therefor I have changed my count to an even more bullish count. Instead of the 115.99 high being wave 3 it is more likely, that it was only wave iii of 3 and wave iv of 3 ended at 113.55 and we are now headed higher in wave v of 3. The targets for this wave v rally is at 119.50, where wave v will be 38.2% of length of the rally from the bottom of wave i to the top of wave iii. However, we could see a move higher towards the 50% target of the length of the rally from the bottom of wave i to the top of wave iii, which would take up to 121.34. This target would make sense as it will also represent an extension of wave 3 of 200% of wave 1. Short term we could see a minor decline to 117.51 and maybe even down to 116.85, but from there the next rally higher towards 119.50 should be seen.

 



EUR/NZD

 

The odds clearly favor, that we have seen the bottom of red wave ii at 1.5506 and we should turn our focus towards the next resistance level to break, which is at 1.5841. A break above resistance at 1.5841 will confirm the bottom and call for a continuation higher towards 1.6010 and later on beyond 1.6218. The extremely deep correction in red wave ii was a bit unusual, but second waves are allowed to retrace all of the first wave, but they can never break below the bottom of the first wave, that meant we had a very clear last line of defence in 1.5445. We should also remember, that we had a "Hidden Divergence", which was validated with the break above 1.5714 and that normally tells me, that the coming rally will be very powerful, so be ready for it.

Elliott wave analysis of Facebook - Wave 3 at its target

Facebook

Since Tuesday Facebook has gained almost 7%, but since I called the bottom almost to the day it has gained more than 77%.

Below you can see the long term chart of Facebook:
http://theelliottwavesufer.blogspot.dk/2012/08/facebook-monthely-close-basis-facebook.html

And here the call for the bottom almost to the day and only 0.54 points from my ideal target:
http://theelliottwavesufer.blogspot.dk/2012/09/facebook-bottom-in-place.html

This is what using Elliott wave analysis can do for you. No other analytic tool had offered anything close to this. If I'm wrong I apologise in advance, but I would like to see it.

Where do we go from here? Despite having reached the target for wave 3 I do think we will see a slightly new high above 31.38, but we should not expect much more upside before a flat correction as wave 4 sets in. This wave 4 could take us all the way down to 25.50, but it could as easily stall at 28.45 in a sideways consolidation, but time will show what shape wave 4 will take. Just remember it will only be wave 4 and wave 5 higher is still to come.

Elliott wave analysis of EUR/JPY and EUR/NZD

EUR/JPY

 

As we saw a clear break above minor resistance at 114.51 we could have seen the bottom for wave 4. However, a break above important resistance at 115.55 is needed to confirm the bottom and a new rally higher towards 115.99 and beyond towards the 117.50 - 117.90 area as the next target. Short term I will be looking for minor resistance at 115.25 to protect the upside for a minor set-back towards 114.51 before the next rally higher to challenge important resistance at 115.55. The risk at this point is a break below 114.07, which would call for one last decline towards 113.24 before the next rally higher.

 



EUR/NZD

 

We are now close to the "Make it or Break it" point at 1.5445. From the EWO indicator I can see, that this market is becoming extremely oversold and at the same time has a possible Hidden Divergence, which means, that we can see a new bottom on the EWO Indicator, but not in the price-action. That said, this only becomes a valid signal if we break back above 1.5714. As long as resistance at 1.5714 protects the upside the risk is, that we will see further downside action, but at no point is a break below 1.5445 allowed, as that will invalidate the count above and call for a more bearish count. Only a break above resistance at 1.5714 will ease the downside pressure and call for a rally higher towards 1.5841 and the next target on the way higher.

Elliott wave analysis of EUR/JPY and EUR/NZD

EUR/JPY

 

What looked like a perfect triangle developing yesterday, is not even close today. That is exactly one of the tricky things about corrections, they can look like one thing one day and the next take a hole new shape. I did say, that I would go for the flat correction as my favorite, because this was the simplest of the two types of corrections and this has pay out, but what is next? I'm still looking for one last decline closer to 113.24 as long as minor resistance at 114.51 protects the upside. However, a break above 114.51 will call for a bottom already in place at 113.55 and a new rally higher towards 115.24 and more importantly resistance at 115.55. Any break above 115.55 will confirm the next rally higher trough 116.00 for a move towards the 117.50 - 117.90 area.

 



EUR/NZD

 

We a new low we are getting very close to the support-line back from August 2012. This support line will ideally protect the downside for a rally above minor resistance at 1.5752 and more importantly a break above 1.5841, which will confirm the bottom for a new rally higher towards 1.6058 and above 1.6219. However if the support-line is broken we have one last line of defence with the low of black wave ii at 1.5445. If this support breaks too, then the above count is wrong and I will have to adapt a much more bearish count.



Elliott wave analysis on Facebook

 

Facebook

 

 

Please see my last post on Facebook here first: http://theelliottwavesufer.blogspot.dk/2012/11/long-term-elliott-wave-analysis-of.html

 

 

Facebook is about to finish wave 3 and I expect it will terminate in the 29.50 - 30.50 area before a flat correction will make up wave 4. Why a flat correction because wave 2 clearly was a simple but deep zig-zag correction and due to the alternation principle a flat would make the most sense in wave 4. That said, it could also be a triangle, but at this point I find that option less likely. How deep will wave 4 go then? I expect it to go towards 28.25, where it will have retraced 23.6% of wave 3, but it would be as common if we saw a slightly deeper correction towards the 38.2% correction target at 26.45, before the last wave higher towards at least 31.48 and more likely higher towards 33.07 and maybe even 34.67.

Elliott wave analysis of EUR/JPY and EUR/NZD

EUR/JPY

 

 

It is still an open question whether a flat correction or a triangle is developing. Just looking at the chart the triangle possibility looks more convincing, but it would not take much to alter that outlook back towards the flat concept. So what do we do? We will hang on to the flat correction concept for now, but protecting will be tight. A failure to break below 114.10 followed by a break above 115.22 and more importantly a break above 115.55 will confirm the triangle, while a break below 114.10 and more importantly a break below 113.65 will confirm the flat correction for a decline down to at least 113.24 for before this correction is over and a new rally above 116.00 will be seen. 

 

 

EUR/NZD

 

 

Trying to pick the bottom of this correction, has been a very difficult task, even though we had a clear loss of downside momentum. Yesterday we saw a spike down to 1.5583, but the following rally does look impulsive, and all we need now is a break above 1.5751 as the first good indication that a important low is in place. However, more importantly we need a break above 1.5841 to confirm the low for a new rally higher towards 1.5975 and 1.6218. Short term I expect minor resistance at 1.5751 will protect the upside for a minor set-back towards 1.5632 before the next move higher through 1.5751 for a test of the important resistance at 1.5841. Only a break below 1.5583 will confuse the picture, but any downside below 1.5583 should be very limited.

Elliott wave analysis of EUR/JPY and EUR/NZD

 

EUR/JPY

 

 

With a rise all the way back to 115.55 this rally corrected more than 80% of the decline from 115.96 to 113.65. That means we are likely looking at a flat correction or a triangle correction. If it is a flat correction we should see a clear five wave decline to below 113.65 to end this correction. If however, this is a triangle we should not break below 113.65 before the next minor corrective rally. At this point it's still impossible to say, which of the corrections that will be the right one, but I normally always go with the simplest kind first, which is the flat correction calling for an impulsive decline down to 113.24 as a minimum target.

Short term we will likely see minor resistance at 115.22 protect the upside for a break below 114.79 for a decline towards 113.93 and maybe even down to 113.55 before the next correction is seen. Only a break above 115.55 will confuse this count a call for a new test of the 115.96 - 116.00 area.

 



EUR/NZD

 

 

As we still have not seen a break above 1.5908 and more importantly 1.5988, which means we could still see a deeper correction towards strong support at 1.5671. However, we are seeing a clear loss of downside momentum, so a break above minor resistance at 1.5710 will be the first indication, that a new rally towards 1.5908 is developing and a break above 1.5908 will be the first indication, that a bottom is in place and the next major rally under way. However as long at minor resistance at 1.5710 protects the upside we must allow for one last move down to 1.5671 first.