Elliott wave analysis of Gold and Silver - Still more downside to come?

 Gold

Please see my long term count here (you have been able to see this count since June 1 - 2012 by clicking my long term gold-count to the right): http://theelliottwavesufer.blogspot.dk/2012/06/gold-is-shine-about-to-disappear.html

I know, that the long term count shows a finished five wave rally of the 1999 low at 253.10 and the above chart only shows, that wave 3 is in place. Which is right? I simply don't know and it really doesn't matter for know. We will find out soon enough, but there is no need to try to figure it out as the downside should get all your attention.

There is good chance the we saw the bottom of red wave iii this week and we should now enter a corrective mode for the next couple of weeks as red wave iv progress, but once red wave iv is over we should see more downside action.

I still see a lot of analysts calling the bottom, but I don't think we are even close... Yes maybe close to a minor bottom, but not the one most are calling for.

There should be no doubt that the rally from 681.10 to 1,920.74 was an extended wave 5 and R.N. Elliott said, that an extended Fifth wave would find support near the low of wave two of the extension and in my view that would be near 864.50. That said we must accept the possibility of a low near the top of wave two of the extension and that would call for a bottom near 1,006.20.

Could I be wrong? Yes of cause as we currently is in the range of red wave two of the extension from 1,043.90, but I don't think this is the correct way to interpreter R.N. Elliott. However, time will show which is right and we just will have to stay flexible.   

Silver

Here too I think, that we have seen the bottom of red wave iii and red wave iv will develop over the coming weeks, but once this red wave iv is over we shall see more downside action.

There is no way I can count the rally of the 2001 low at 4.00 as a five wave rally. Therefore I have labeled the rally since the 2001 low at 4.00 as a corrective A-B-C rally.

I will be looking for a bottom in the 12.09 - 13.14 area, which should be followed but a new major rally, but for now we should still stay focused towards the downside.  

Elliott wave analysis of the Dow Jones Industrial Index

Dow Jones Industrial Index

Please see my last post from May 24 here first: http://theelliottwavesufer.blogspot.dk/2013/05/elliott-wave-analysis-of-dji-is-market.html

I was looking for a correction Down to 14.355. We have stopped short of this possible target, but all demands for the decline from the top at 15,517 has been fulfilled and we should be ready for a rally to new Highs above 16,000.

The correction from 15,517 has been bigger and taken longer than any of the correction during wave iii and this is what we normally would expect. Therefore we have seen the bottom of wave iv and is now headed higher in wave v.

To confirm that wave iv is indeed over we would like to see a break above the Falling channel resistance-line near 15,250, but more importantly we would like to see a break above red wave b at 15,340 as that would confirm the next rally higher in wave v.

All that said, once a new high is set above 15,517 we will have to look for any signs of exhaustion, as the major expanding triangle is coming to an end. Once the D-wave of the expanding triangle is finished we should expect a major decline in wave E.

Therefore it would be prudent to use this last rally to exit all or most long position and take cover.

Elliott wave analysis of EUR/JPY and EUR/NZD

 EUR/JPY

The rally of the 126.57 low has been very dynamic and the fact, that we have broken above the falling channel resistance-line. Has forced me to make a slight change to my count. The most likely count is now, that we are in wave b towards 131.27 before the next downside pressure should be expected. I did warn yesterday, that the overlapping structure down from 129.90 could be either a leading diagonal or a correction of the 129.90 high and the impulsive rally indicates, that the decline of the 129.90 high was a red b correction. I'm  now looking for red wave c higher towards 131.27. Once this red wave c is finished we should expect a new powerful decline down to at least 124.96 again.

EUR/NZD

We have seen the expected minor rally higher. It went a little higher than the expected 1.6789 (the top has been at 1.6801), but that does not damage the larger count. I'm now looking for a break below 1.6705 and more importantly a break below 1.6665 to confirm the next decline towards 1.6600 and 1.6541. Once we reach support at 1.6541 we should expect a new correction higher, but this correction should stay well below 1.6801. For now we should stay focused towards the downside and a break below 1.6705 as the first indication, that a decline to 1.6541 is in Progress.

Elliott wave analysis of EUR/JPY and EUR/NZD

 EUR/JPY

The short term important support was attacked again yesterday and once again the attempt failed. The lack of downside pressure is kind of worrying and as the structure of the decline from 129.90 is very overlapping, we should stay alert. The very overlapping decline from 129.90 can mean two things.

1) That a leading diagonal has been building. If this is the case we should likely see a rally towards 127.80 and maybe even higher towards 128.24 or 128.63 in wave ii before the real downside pressure takes over.

2) That the hole decline from 129.90 has been a triple zig-zag correction. If this is the case we should soon see a new much bigger rally materialize towards at least 131.46.

Both scenarios is calling for some upside pressure for now, but the slightly longer outcome will be totally different. For now we will just have to wait and see, which scenario is the right one. However my slightly preferred count is the leading diagonal Count.

 

EUR/NZD

With the break below important support at 1.6825 (top of red wave i) we knew, that we had seen the top of black wave v and wave C at 1.7111. Even though I believed, that we had more more room towards the upside. I did warn, that a top could be in place any time, as we had a complete five wave rally from the 1.5080 low.
So what can we expect from here? First of all we are likely looking for a corrective X-wave building. The ideal target would be just below 1.6388. Therefore we will have to switch our mind-set towards a corrective decline rather than an impulsive rally higher. Short term I'm expecting a minor corrective rally towards 1.6789, from where the next part of the X-wave decline should take place towards 1.6529.

Elliott wave analysis on USD/CAD - Long term count.

Long term Elliott Wave Count for USD/CAD:

 

MONTHLY

Weekly

 

 

I think we should start with the long term Picture and Count.

 

Looking at the monthly chart the rally since the 0.9562 low in early 1974 to the 1.6187 top in early 2002 was a large Zig-Zag (A-B-C) correction. 

 

Wave A went from 0.9562 to 1.4450.

 

Wave B corrected a Little more than 61.8% of wave A and went from 1.4450 down to 1.1190

 

Wave C was almost perfectly equal to the length of wave A and went from 1.1190 up to 1.6187.

 

Once this 28 years zig-zag correction was in place we saw a brutal impulsive decline erasing more than the 28 year rally in just 5 years.

 

However, trying to fit all of the decline from the 2002 high at 1.6187 Down to the 2007 low at 0.9056 into an impulsive decline is impossible.

 

If however, we Count the decline from 1.6187 down to 1.1740 as the impulsive decline and all the rest as a correction, we get some very nice Fibonacci relationships.

 

If we start with the impulsive decline from 1.6187 to 1.1740 we will find the following Fibonacci relationships:

 

Wave 3 is 3 times longer than wave 1

 

Wave 5 is 0.618 times the distance traveled from the top of wave 1 at 1.6187 down to bottom of wave 3 at 1.2644

 

If we then look at the expanded flat correction that followed we find the following Fibonacci relationships:

 

Wave b was 3 times the length of wave a from 1.1875 and down to 0.9056 and clearly in three waves. If we look at those three waves wave c was 1.618 times longer than wave a and wave b corrected 50% of wave a.

 

Wave c of the expanded flat correction became 4.236 times longer than wave a and is clearly in five waves.

 

If we now move down to the Weekly chart, which shows the five wave c rally from 0.9056 to the high of 1.3063. The following decline from 1.3063 to 0.9406 is also in three waves making it a correction. Wave c is equal in length to wave a. Therefore it's most likely and X-wave. That Means we should be looking for an other corrective rally from the 0.9406 low.

 

Even though it's most likely to be a correction we could be looking at a very powerful one. As can be seen, we have broken above the medium term resistance-line and add to that, we have seen a break above the rising channel resistance-line, which is very bullish if confirmed and could sent us all the way up to the 1.16 area if this rally really takes off.

 

However, there are some hurdles along the way. One hurdle is at 1.0658 and at 1.0853, but if the later breaks then we should see 1.1600 tested.

 

 

 

 

 

  

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Elliott wave analysis of EUR/JPY and EUR/NZD

 EUR/JPY

We saw a new attempt to break below strong short term support at 127.28 yesterday. This attempt failed, but it's as the downside pressure is getting stronger and stronger. A break below support at 127.28 should get things going towards the downside and indicate a new decline towards strong medium term support at 124.96 (purple line) and only a clear break below here will open up for my ideal wave 2 target at 118.73. However, as long as support at 127.28 is protecting the downside we could see a new test of the falling channel resistance just below 129.00, but it should continue protecting the upside for the break below strong short term support at 127.28.

EUR/NZD

Here we saw a new attempt to break above short term resistance at 1.7006 yesterday, but it failed and that turned us down towards strong support at 1.6825. The support at 1.6825 marks the top of red wave i of black wave v and should not be broken, as that would leave us with an overlap between red wave i and red wave iv, which is not allowed under the Elliott Wave Principle. Therefore I continue to expect, that support at 1.6825 will continue to protect the downside for a break above resistance at 1.6960 and more importantly a break above 1.7006, which should open up the upside for the final rally higher. As both red wave i and red wave iii has been almost equal in length, it's entirely possible, that red wave v will be the extended wave. An extension in red wave v will equal the distance traveled from the bottom of red wave i at 1.6388 to the top of red wave iii at 1.7111 and will give us a possible red wave v target near 1.7550. That said we will have to stay alert for the signs of a possible top as all requirements for an impulsive rally since the 1.5080 low has been fulfilled.

Elliott wave analysis on USD/ZAR - Long term count

USD/ZAR

JT asked about my count for USD/ZAR as I recently said I expect ZAR to weaken.

My preferred count is, that a large triangle is developing and that we currently are in the later part of the D-leg higher towards at least 10.71, but we could easily see it higher towards 11.10 before the D-leg is over and the final E-leg lower takes over.

However, there is a much more bullish possibility. If the bottom at 5.535 in late 2004 where all the correction needed, then the rally from 5.535 to 11.81 in 2008 was a leading diagonal as wave 1 and the decline from 11.81 down to 6.53 in 2011 was wave 2 and we are currently in wave 3 higher and if this is the case, then resistance near 11.10 should be overcome with no problem at all. However, for now I do think, that the triangle scenario fits the picture the best, but we should always stay flexible.

Elliott wave analysis of EUR/JPY and EUR/NZD

 EUR/JPY

With the break below support at 128.14 we have had confirmation, that a top is in place and a new decline towards important support at 124.96 is ongoing. Only a break below support at 124.96 will confirm my long held target at 118.73, where wave 2 will have corrected 38.2% of wave 1. Short term I'm looking for a break below minor support at 127.85 for a continuation down to 127.28 and a break below here should accelerate the decline towards strong support at 124.96.

EUR/NZD

As important support at 128.25 (top of red wave i) protected the downside I'm now looking for a break above resistance at 1.7033 to confirm, that the next rally towards the first possible target for black wave v at 1.7160. That said I do expect, that black wave v will continue towards its next possible target at 1.7400, where it will be 50% of the distance traveled from the bottom of black wave i (1.5080) to the top of black wave iii (1.7109) and lastly it could reach 1.7640, where it will be 61.8% of that same distance. However, we shall remember, that in the sense of the Elliott Wave Principle we can already count five waves from the 1.5080 low and therefore we should be aware of the risk of a possible top at any time now. 

Elliott wave analysis of EUR/JPY and EUR/NZD

 EUR/JPY

The falling channel resistance-line has now been tested three times and held. This is normally a signs of strength and could indicate very strong downside pressure soon. As I'm looking for wave c lower, a strong downside pressure would make sense. Short term I'm looking for a break below 128.61 as the first indication, that renewed downside pressure is taking over. While a break below 128.14 is needed to confirm, that yet another top is in place and wave c lower towards at least 124.96 is in progress. However, the risk is still a break above 129.90, which will open up for a move towards 131.31 and likely also higher towards the top at 133.81, in a much more complex correction.

EUR/NZD

I'm looking for strong support at 168.25 (top of red wave i) to protect the downside the downside for a break above resistance at 1.6975 and more important a break above resistance at 1.7053, which will confirm, that a new high above 1.7113 will be seen. As the target for this ongoing black wave v we are looking for minimum 1.7162, but a more likely targets is at 1.7400 and possibly at 1.7640. Once this black wave v find its top we should expect the biggest correction we have seen since the 1.5080 low, both in points and in time.

Crude Oil - The break-out failed.

Crude Oil

Please see my last post here first: http://theelliottwavesufer.blogspot.dk/2013/06/is-black-gold-finally-coming-to-live.html

Crude Oil failed to sustain its break above the possible triangle resistance-line. Last week price-action is actually very bearish. Not alone did the possible break above the resistance-line fail, but we also had a bearish engulfing pattern. This could be the type of action we need to really get Things going here. The failure break and quick reversal back into the triangle could be a warning, that a new wave of declines should be expected. To confirm a more bearish Picture we need a break below 91.05.

That said, I have found the price-action in Crude oil very dull for a long time, but it seems thing might be changing. For now we don't really know if it's a "boy" or a "girl" only time will tell, but this is not a commodity to trade without having your stops in place, but then you should always have your stops in place.

Elliott wave analysis of EUR/JPY and EUR/NZD

 EUR/JPY

As we broke above resistance at 129.34 the only line of defence we had back was the falling channel resistance-line near 129.90. This resistance-line has so far protected the upside and I'm now looking for a break below important support at 128.09 to confirm that the next decline towards strong support at 124.96 is developing. But what if we break above resistance at 129.90? In my eyes, that would indicate an even more complex correction is developing. I have not given up on my ideal target at 118.73, where wave 2 will have corrected 38.2% of wave 1. One thing is for sure, I do not think that the correction from 133.81 has taken long enough. Until now it has taken about four weeks and I expected to take 4 - 8 weeks more.  

EUR/NZD

We saw a new top at 1.7113 yesterday, so from an Elliott Wave Perspective we now have a five wave rally since the 1.5080 low. That does not mean I think this rally is over, but we are for sure moving closer to the point in time, where we should expect a bigger correction. As an minimum for this rally, I expect to see 1.7162, where black wave v will be 38.2% of the distance traveled from the bottom of black wave i to the top of black wave iii. However, it is more likely that we will see a continuation higher towards 1.7400, where black wave v will be 50% of that distance and lastly it could move towards 1.7640, where black wave v will have traveled 61.8% of that distance. Which target is more likely? I think that the 1.7640 target is the most likely target, but from now on a top can be put in at any time. So it's important to protect ourself the best we can. For now such potection would be a stop at 1.6820, which is just below the top of red wave i. 

Elliott Wave analysis on Gold

Gold

Is breaking lower, but is it a big surprise? To some it might be, but if you had been following the Elliott Wave Principle it should not be a surprise.

You can see my post from May 21 here: http://theelliottwavesufer.blogspot.dk/2013/05/elliott-wave-analysis-on-gold-and-silver.html (which, by the way, also point you to my post from April 17).

I'm looking for blue wave v down to 1,258, but will that be the bottom, that so many is looking for? Will it be a good place to enter into a long position?

Not in my view. If blue wave v does end at or near 1,258 it will only mark the bottom of red wave iii and we should see more downside action once red wave iv is over.

That said, I'm seeing gold all the way down to the floor as some are. In my view this has all the ear-marks of a major wave 4 and once it's over we should see a new powerful rally in wave 5 to above 1,921, but it's to early to build long position unless you have very Deep pockets...

Elliott wave analysis on EUR/JPY and EUR/NZD

 EUR/JPY

After the break above important short term resistance at 126.91 I was expecting a rally higher towards 128.28. We have seen a rally beyond that point, but it is no critical in any way. A break above resistance at 129.34, would not be expected, but only a break out of the falling channel will indicate, that the wave 2 correction from 133.81 ended early and the next impulsive rally higher in wave 3 has already begun. However, if resistance at 129.34 protects the upside for a break below 127.81 and more importantly a break below 127.05 we know, that we have a top in place for a new decline towards strong support at 124.96.

EUR/NZD

We saw red wave ii of black wave v end at 1.6615 yesterday and as it would be expected of red wave iii, it was very explosive. However, I expect that it was only the first part of red wave iii and that we should soon see this rally higher continue towards 1.7109 and higher towards 1.7320. Short term I'm looking for support at 1.6810, which will ideally protect the downside for the next impulsive move higher towards resistance at 1.7109.

Elliott wave analysis on EUR/JPY and EUR/NZD

 EUR/JPY

When strong short term resistance at 126.91 was broken we knew, that we need a rally towards 128.28 before the next attempt to break below strong support at 124.96 will be seen. We have seen a test of 128.11 till now, and as long as support at 127.23 protects the downside I expect, that we will see one last rally higher to 128.28 before the next decline sets in. However, a break below 127.23 and more importantly a break below 126.91 will confirm, that we already has terminated the correction from 124.96 and a new test of this important support should be seen. Longer term I'm still looking for a break below 124.96 for a decline towards my ideal target near 118.73, where wave 2 will have corrected 38.2% of wave 1.

EUR/NZD

We are currently in black wave v higher from the 1.6388 low. Since the low at 1.6388 we have seen an impulsive rally to 1.6825, which marks red wave i and we are currently in red wave ii, which I expect needs one last decline to just below 1.6669 before the next rally higher towards at least 1.7109 and more likely higher towards 1.7372 in an extension in red wave iii. As long as short term resistance at 1.6825 protects the upside we are expecting the decline towards 1.6669, but a break above 1.6825 indicates, that red wave iii is already under way higher.

Elliott wave analysis on the Japanese Nikkei Index

NIKKEI Index

Alastair asked my opinion on the Nikkei index as it produced a Gravestone Doji in May and what the consequences on other markets could be.

The above count is my preferred count and the big question is of cause whether we have begun a new impulsive rally or it's just an X-wave and a new decline should follow.

I do prefer the impulsive count, but in this case we should see a break above important resistance at 15,943.
However, looking at the current rally from the 2008 low at 6,995 wave 1 or a moved up to 11,408 the following decline to 8,136 is wave 2 or b and the current rally is wave 3 or c. As can be seen we have only finished three waves at 15,493 and therefore we need at least one more rally to above 15,943. But will it be a minor break followed by a new decline to below 6,995 or will we see a break that is confirmed as only wave v of 3 and will be followed by wave 4 and 5? As I said I think the odds favors the impulsive count and that means a confirmed break above 15,943.

But what about the Gravestone Doji? As it is with all candle formations they will have to be confirmed, which in this case means a lower close in June, but even if that happens it does not alter my count above and therefore I would be very careful about being to bearish on the Japanese Nikkei Index. I don't think we will see the Nikkei index much lower and is looking for a break above 13,585 as confirmation that wave iv of 3 is over and wave v of 3 higher to above 15,943 is developing. However, until we have seen a break above 13,858 we could see a slightly deeper decline towards 11,806 before wave iv of 3 is done.

About the implications on the other markets? I don't know, what the implications will be. I'm still looking for one more rally in the US indices. I expect the JPY will continue to weaken once the ongoing corrections is over. I'm looking for a weaker AUD and NZD and likely also CAD and ZAR. But if the rally in the Nikkei has anything to do with that I really don't know and does it really matter? If you just follow you analysis and know when and where you are wrong it can't be all that bad.

Elliott wave analysis of EUR/JPY and EUR/NZD

 EUR/JPY

We are currently in a wave 2 correction, correction the entire rally from the 94.10 low to the 133.81 high. I expect this correction to correct 38.2% of wave 1, which will give us an ideal target near 118.73. We are currently in the middle of this correction and I'm looking for important resistance at 127.01 to protect the upside for a break below 126.13, which will confirm a new test of strong the neck-line support at 124.96 and a break here will accelerate the decline towards my ideal target 118.73. However, if important short term resistance at 127.01 gives away, we need a move higher to 128.28 before we can expect the next part of this decline.

EUR/NZD

With the break above important short term resistance at 1.6590 we had the confirmation we needed to say, that we did see the bottom of wave iv at 1.6388 and wave v higher towards the ideal target near 1.7640 is now developing. Short term we now find support at 1.6651 and strong support at 1.6595, which ideally will hold for the next rally higher towards my next targets 1.6913 and 1.6983, but they should just be small bumps on the way higher towards our ideal target near 1.7640.

Elliott wave analysis of EUR/JPY and EUR/NZD

I have had some trouble with my normal charting system this morning, so I have had to use my back-up system, but I hope everything will be fine later today.

 EUR/JPY

Resistance at 128.17 did protect the upside for a break below 126.16 which has open up the downside again for a new challenge of important support near 124.96 and once this support breaks we should see a powerful decline towards our target at 118.73, where wave 2 will have corrected 38.2% of wave 1. Short term we could see a little more upside towards 126.55, but we should not see a break above 127.01 as that would indicate a new rally higher towards 128.29 before down again. However, a break below 125.81 and more importantly a break below indicates, that the next real downside pressure has begun.

EUR/NZD

With a low at 163.88 (just 11 pips below my ideal target at 1.6399) we have most likely seen the bottom of wave iv and should now see wave v higher. We still need a break above important resistance at 1.6590, but a break above here will confirm the bottom is in place at 1.6388 and call for a rally higher towards 1.7640 as the ideal target for wave v. Short term I would like to see support at 1.6465 protect the downside for the break above 1.6590, but we must allow for a move all the way down to 1.6388 before the next rally higher. However, support at 1.6388 can not be broken with even a single pip as that would invalidate my bullish call. 

Elliott wave analysis on EUR/USD and GBP/USD

 EUR/USD

Zink has asked me to update my Count on EUR/USD and GBP/USD and if has changed my long term counts.

Let me start by saying, that I have not changed my long term Counts neither on EUR/USD or GBP/USD.

I expect wave c to peak any time now, but we will have to remember, that wave 2 can correct all of wave 1, but not a single pip above the start of wave 1, which is at 1.3711. If we break above 1.3711 I will have to change my Count to a very bullish Count, but this scenario is not my preferred Count at this point. I'm  looking for a break below 1.3266 and more importantly below 1.3177 as confirmation, that we have seen wave c peak and a new decline in wave 3 should be under way.

GBP/USD

Long term I'm still looking for this cross to move much higher. However, if we are in b-wave triangle we have only seen wave c bottom at 1.4831 and should now see wave d higher towards 1.6255 and then finally wave e lower before wave C take us much higher.

But is it possible, that USD can be stronger against EUR and weaker against USD? YES it's possible, but I might also just be wrong in one of my calls and if this the case I think it's my EUR/USD Count that is wrong, but for now I will keep my Counts as above and stay flexible.

Elliott wave analysis of EUR/JPY and EUR/NZD

 EUR/JPY

I'm looking for a decline in wave 2 towards the ideal target at 118.73. Since the top of wave 1 at 133.81 we have seen a zig-zag correction as wave-w interrupted by an x-wave and ideally we are in wave y down towards at least 123.75, where the ongoing wave y will be equal to wave w. That said we will have to consider an alternative count, in which the x-wave is not over yet. In this alternative Count, the rally from 127.62 to 131.31 only was wave a of the x-wave. The decline from 131.31 to 124.95 was wave b of the x-wave and we are just entering wave c of the x-wave for a rally towards 132.51. If this count is to become my top Count, we will need a break above 128.17. If however, resistance at 128.17 protects the upside for a break below 126.15 and more importantly below 124.96, then we can be sure, that the x-wave did end at 131.31 and wave y is ongoing for a decline towards 123.75 and possibly lower.

EUR/NZD

I'm still looking for black wave iv down to the ideal target at 163.99. Since the top of black wave iii at 1.7109 we have seen a three wave decline to 1.6537, which was wave w and the following rally to 1.6913 was an x-wave and we are now in the second zig-zag lower. Of this second zig-zag we have seen the a-wave and are currently in the b-wave and the question here is, if this b-wave ended at 1.6599 or we need a little more upside towards 1.6658 and maybe even to 1.6719 before the final c-wave lower to 1.6399 is ready to take over? I think that we would see a little more upside before the final c-wave to 1.6399 can take over.

Elliott wave analysis on EUR/GBP

EUR/GBP

Diversanta asked me for the short term count in EUR/GBP, so here we go.

We are clearly in an uptrend and the decline from 0.8815 is corrective and is wave 4, but is wave 4 finished or do we need one more decline. The rally of the 0.8398 low is overlapping in its structure, but it could be a leading diagonal and therefore a wave i. However, to confirm that we are in wave 5 higher we need a break above 0.8551 and more importantly a break above 0.8598, that would confirm that wave 5 higher towards 0.8918 and possibly 0.9043.
The flip-side is a break below 0.8398, that would call for a decline closer to 0.8287, but this scenario is not the preferred one at this point.

Elliott wave analysis of EUR/JPY and EUR/NZD

EUR/JPY

With the rally to 129.34, the correction from 127.10 became slightly higher than I expected, but It did not change the larger picture in any way. We are currently testing strong support at the neckline at 126.50, but it should just be a matter of time, before this support breaks and we sees a continuation lower towards 125.77 and 125.20. My ideal target for the ongoing wave 2 is at 118.73, where wave 2 will have corrected 38.2% of wave 1 and it is also, where we find the bottom of wave iv of one lessor degree. Short term we will find resistance at 127.09, which ideally will protect the upside, but it will take a break above 128.17 to invalidate my bearish call.

EUR/NZD

My expectation of a top at 171.09 was clearly confirmed yesterday, as we broke below support at 1.6692 without any problems. I'm currently looking for black wave iv declining to 1.6399 before the final black wave v can take over. Short term I'm looking for resistance at 1.6934 to protect the upside for a break below 1.6798, which will confirm that the next decline lower is unfolding. However, if we break above 169.34 we might already have seen the bottom of black wave iv at 1.6537 and should expect a new rally towards 171.09.

Is the Black Gold finally coming to live?

Crude Oil

Is the Black Gold finally coming to live?

A close above 96.20 will confirm, that the triangle consolidation we have seen since May 2011 is finally coming to and end. That said, I would like to see a break above resistance at 98.24 too and if that's seen, then we should see a rally towards strong resistance at 110.60.

As we have been in this low volatility Trading for a very long term now, we can be sure, that once we get the break-out it will be quite a volatile move that follows.

We have seen many attempts to break out of this long term consolidation and every one of them has failed, so stand your ground till you are certain that we have a daily close above 96.20. However, if you can't wait to buy, then use a close stop at 93.65 or the safe long term stop at 91.00 as your protection.

Elliott wave analysis of NZD/USD and AUD/USD

NZD/USD

Please see my post from May 8 and May 18 - 2013 here first:

http://theelliottwavesufer.blogspot.dk/2013/05/elliott-wave-analysis-of-audusd-and.html (May 8)

http://theelliottwavesufer.blogspot.dk/2013/05/elliott-wave-analysis-of-usd-today-its.html (May 18)

Yesterday we made a perfect touch Down on my May 8 target-zone between 0.7750 - 0.7800 as we yesterday tested a low of 0.7756. Not alone did we have strong long term support at 0.7750, but we also had the 2.618 times extension target of wave i at 0.7801, reinforcing the strength of its importance. What to expect now? We should expect wave iv correcting wave iii. The most normal correction target of wave iii would be the 38.2% corrections target, which will mean a rally to 0.8073, but from time to time we does see small corrections, which would be the 23.6% target at 0.7952 and sometimes we see larger corrections, which would be the 50% target at 0.8171, but one thing is almost certain, once this correction is over, we can expect wave v lower and this time strong support at 0.7750 will break and that will have long term consequences for this cross... Like a decline to at least 0.6630 and likely even lower.

AUD/USD

What about the Aussi (AUD) you might ask. As you can see the Picture is pretty much the same. Yesterday we mad a perfect touch down at the 2.618 times extension target of wave i at 0.9415 and we should now see a 38.2% correction of wave iii towards 0.9727 and then down again.

Elliott wave analysis of EUR/JPY and EUR/NZD

 EUR/JPY

We have seen a nice impulsive decline from the 131.31 high, which confirms that the x-wave indeed did end at 131.31 and the second zig-zag lower now has begun. Short term I'm looking for a minor rally towards resistance at 128.70 and maybe 128.96 before the next decline sets in. A break below support at 128.09 and more importantly a break below 127.42 confirms, that the next decline towards strong support at 126.30 is developing. However, a break below support at 126.30 confirms, that a decline to my ideal wave 2 target at 118.73 is developing.

EUR/NZD

I think we saw the culmination of black wave iii at 171.09 yesterday. It was a little higher, than my ideal target near 1.7040, but then, trying to pin-point the top of an extended wave three is not the most easy thing to do. Short term i'm looking for a minor rally towards 1.6956 and ideally to 1.6992 before the next decline lower begins. This decline should break below 1.6800 and more importantly break below 1.6692, which will confirm that we have seen the top of black wave iii and that black wave iv towards 1.6399 is developing. That said, We must consider the possibility of black wave iv to be sub-normal, because of the strength of black wave iii, but only time will tell.

Elliott wave analysis of EUR/JPY and EUR/NZD

 EUR/JPY

The x-wave ended a little higher (131.31) than the ideal 130.88, where it would have corrected 61.8% of the decline from 133.81 down to 126.11. I'm now looking for the second zig-zag lower towards the ideal wave 2 target at 118.73, where wave 2 will have corrected 38.2% of wave 1 and at the same time, it is where we will find the bottom of wave iv, of one lessor degree. Short term I expect resistance at 130.68 will protect the upside for a decline towards 129.20 where we will find the next strong support, but it should just be a matter of time before this support breaks and the decline towards 126.11 and 118.73 continues. That said, a break above 131.31 and more importantly a break above 131.47 would call for a full test of the top at 133.81 and maybe even higher in a much more complex wave 2 correction.

EUR/NZD


Wave iii is still progressing nicely, but we are slowly but surely closing in on the top of black wave iii, which I expect will be found close to 1.7040. However, for now we are "only" in red wave v, which also will mark black wave iii, higher towards 1.7040. Once wave red wave v and black wave iii is in place we shall see a correction towards at least 1.6617 and more likely down to 1.6354, where wave iv will have corrected 38.2% of wave iii. As black wave ii was a complex wave, we should expect a simple zig-zag as black wave iv. However it could also become a complex triangle, but at this point it is less likely, but time will show us. 

 

Elliott wave analysis on EUR/JPY and EUR/NZD

EUR/JPY

With a low at 126.11 we did see a very slight break below my target at 126.15, but the following rally has broken above the bottom of wave i at 129.41 and therefore it can not be wave iv of c. Therefore I have changed my count slightly to a finished wave c and w at 126.11 and we are now in a x-wave towards 130.36 and possibly even 130.88 before the next decline towards my major wave 2 target near 118.73. Short term I'm looking for support in the 129.10 - 129.20 range for the rally higher to 130.36 and possibly even 130.88 before the next decline set in. A break below 128.79 confirms that the x-wave is over and the second zig-zag correction has begun.

EUR/NZD

The wave 3 rally just keeps moving higher and higher. We most likely ended green wave v and blue wave iii at 1.6687 and after the a very small a brief blue wave iv we saw the next move higher in blue wave v, which when it ends near 1.6921 or maybe even first at 1.7053 only will end red wave iii. As I said trying to sell EUR looking for a deeper correction could easily leave you with a loss and no chance to get onboard the train higher again. Short term I'm looking for support at 1.6726 and 1.6678 to protected the downside for the rally higher towards 1.6921 and 1.6961 as the next small targets.

Elliott wave analysis of EUR/USD and USD/JPY

EUR/USD

The above Count is my preferred Count for EUR/USD at the moment. I'm looking for wave c of 2 towards the 61.8% retracement target at 1.3342 from where I will be looking for a new decline in wave 3. However I would like to see resistance at 1.3342 protect the upside wave 2 can and is allowed to retrace 100% of wave 1, which would mean we have to allow for a move all the way up to 1.3710, but not 1.3711 or 1.3712 to 1.3710 and not a tick higher as that would invalidate the bearish count and I will have to go to the alternate Counts, but for now the above is my preferred Count.

USD/JPY

The above count is my preferred count for USD/JPY and it has worked nicely till now. I think we saw red wave iii end at 103.73 and I currently looking for red wave iv, which should decline towards 95.57 and maybe even down to the 50% retracement of red wave iii at 90.43. That said at 95.57 we should see strong support and likely quite a rally higher. Not alone is support at 95.57 the 38.2% retracement, but it's also the middle of the rising channel, but after a rally higher to 99.85 we should see renewed downside pressure and a decline towards the 50% retracement target near 90.43.

Elliott wave analysis of Natural Gas

Natural Gas

Is currently at strong support and we should expect a new rally higher soon. We are at strong support and the next rally will be wave iii of 3 and should take us higher towards 5.97. Remember that I always expect wave iii to extend and at 5.97 wave iii will be 1.618 times longer than wave i of 3. If Things doesn't pan out as expected, when should we begin to worry? If we break below 3.57 it would not be the best of sings, but only a break below 3.05 will invalidated my bullish Count.

How to find Support and Resistance in the real world as the waves unfold.

EUR/JPY

Jeff asked me how I obtain my support and resistance levels. It's actually pretty old-school stuff.

Of cause the structure is important, so is previous tops and bottoms and the of cause you need to calculate the Fibonacci correction targets. I always calculate the 38.2%; 50% and the 61.8% correction of a wave. As you can see below I have a system doing the calculations for me, but it's easy to doing them by a spread sheet, if you don't have a system that can make them for you.

So let's take a look a the decline from 131.41 down to 126.11, because that was a full five wave decline on the 15 min. chart.

On the first chart above I have no counts on it, but from 131.41 down to 129.39 was wave i, so i calculated the Fibonacci targets for this move, please see the chart above. and as you can see the 61.8% correction target came in at 130.64 and at the same time we had a bottom and a top at this level too, which made this an important short term resistance. You can my text from June 6 above, where I said, that this rally was likely to meet resistance at 130.31, that I would likely to protect the upside, but even a break higher to 130.65 would not invalidate my bearish call. As you can see the resistance at 130.65 pretty much did the job as the high came in at 130.73, but that was above 130.65 you might say? Yes, but we never made a close above 130.65 on the 15 min. chart and therefore the bearish call was still valid.

Okay the same chart as above, but now I have label the waves we now have wave i and ii in place and is looking for wave iii down. I always expect wave iii to extend no matte, what time frame I'm looking at. So on June 6 I said we could possibly even see a decline down to 127.19 (1.618 times wave i), but that was calculated from 130.31. Now we saw a move up to 130.73 and the same distance (1.618 times wave i) down from 130.73 would give us a target at 129.46 and we saw a bottom at 129.44 and that is how I would find the next support.

Moving on we can now calculate the correction targets five wave decline from 131.41 down to 126.11 and as you can see at the above chart, I now calculate the Fibonacci targets for the entire decline to get the possible resistance levels. We already know, that the top of wave iv of one lessor degree is a natural attraction levels, and here it falls together with the 50% Fibonacci resistance level, so we should not expect much more correction from here. I would guess that we will see a limited and very short lived spike just above 129.18, before wave 5 lower takes over. A break below 128.17 will confirm the top and that wave 5 lower has begun.

On the above chart I have labeled the wave 4 correction and we should expect wave 5 to start any time now and the target for wave will be? I calculate the 38.2%, the 50% and the 61.8 from the top of wave 1 to the bottom of wave 3 and subtract it from the top of wave 4, which gives me the following targets: 127,17 (38.2%); 126.54 (50%) and 125.91 (61.8%) and as both 127.17 and 126.54 is above the low at 126.11 I would expect wave v to end near 125.91 and that would make wave c of the first A-B-C correction from 133.81. Is anything supporting that 125.91 could make a strong support area? You bet - Just take a look below.

Now here is something that could be mind blowing. If we do find support near 125.91 and sees a 61.8% correction of the decline from 133.81 down to 125.91 we will see a top near 130.79 like in a S/H/S top and if the next decline break below the neck-line at 125.91 the target will be 118.01 and remember that the 38.2% correction target of the entire rally from 94.10 to 133.81 comes in at 118.60 and the the bottom of wave 4 of one lessor degree comes in at 118.73. This is all speculation at this point, but it would fit the Picture nicely right?