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.
Hi, I've been following your posts on EUR NZD for quite a while. Just been curious in general how the analysis and correlation in other pairs affects your forecasts. For example, currently, if we split the EUR NZD in EUR USD and NZD USD - for EUR USD it's known we are in a triangle and expecting a movement to above 1.34, hopefully 1.38. That's the preferred count at the moment. As for the NZD USD, I've been searching all over the net, and couldn't find a reliable long term elliot wave analysis. However, since NZD is very correlated to AUD, and AUD is currently also in a triangle expecting a down movement to around parity (regardless as you pointed out in your earlier posts whether it's a bulish or a bearish long term scenario, my prefered count is a bulish one after the triangle is completed). So, if EUR USD is expected to go up and NZD USD down at the moment, are such situations, where you kind of get a double assurance for an expected trend the best ones to try to trade with? Or is the pure EUR NZD elliot wave analysis sufficient? Also is that maybe the reason why you are currently focused on EUR JPY and EUR NZD, since their related pairs have been moving in opposite directions in the last couple of months, so these 2 pairs had the biggest movement?
ReplyDeleteI'm maybe oversimplifying all this, so please forgive me, I may have got it completely wrong, after all I'm still a total begginer in all this.
Thanks and btw I appreciate your posts very much.
EWS, I think this is a important new related to JPY: http://www.bloomberg.com/news/2013-01-08/japan-to-buy-esm-bonds-using-forex-reserves-to-help-weaken-yen.html
ReplyDeleteHi Jazz,
ReplyDeleteThank you very much.
I find that the problem, when you try looking at correlations between two currency pairs is, that correlation suddenly dissapear for a while, a postive correlation become negativ for a while or the correlation dissapears all together. There can be many reasons for that. But in my expirenc looking at the correlation between two currency pairs like EUR/USD and USD/NZD will not make your analysis better in any way.
I have tried it many many MANY times and always get it wrong, when I have done it so why try to or even spend time looking at it.
Analyzing just EUR/NZD works well on its own. Of cause I get it wrong from time to time, but as I always say. You have three rules in the Elliott Wave Principle. If one of those three rules are broken you count is wrong and you will have to adapt a new count.
You can't force the market to do anything. You will have to stay flexible and let the market tell you what it will do next.
Technical analysis or for that sake the Elliott Wave Priciple is no Holy Grail, but in my humble view the best way to time any market and especially the FX-Market.
You will never get me to say, that fundament analysis doesn't work, but only using fundamenta analysis will always make your entry late in the FX-Market. A very good example is JPY, which took of way before the fundamentals began to point in that direction.
Kind regards
EWS
Hi Manuel,
ReplyDeleteThank you very much for the link.
Kind regards
EWS