Elliott wave analysis of S&P 500 - The S&P 500 is headed for 2,081.85

S&P 500 is headed for 2,081.85 as the first possible upside target 

The rally of the 1,818.90 is clearly impulsive and we can already count five wave up from 1,818.90, but is the top in place? Not likely, when we have the first four waves in place, we can calculate the possible targets for the fifth wave. The first target to plot is where wave five will be equal in length to wave one and red wave (v) will be equal in length to red wave (i) at 2,131.42. 

The next two target to calculate is where wave five will be either 38.2% or 61.8% the distance traveled from the bottom of wave one to the top of wave three and add those two calculations to the bottom of wave four. In this case, that will give us the 38.2% target at 2,081.85 while the 61.8% target comes in at 2,130.73.

So the first target, that we should aim for is at 2,081.85, this could be the final top for red wave (v), but only time will show. If however we break clearly above the 2,081.85 target, then our focus should turn towards the 2,130.73 - 2,131.42 area as the next possible top for red wave (v).

At this point, only an unexpected break below support at 2,002.20 will indicate that the top of red wave (v) already is in place and shift the focus to the downside.  

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Elliott wave analysis of EUR/JPY - Wave B over at 137.01 or not?

EUR/JPY correction over at 137.01 or not? 

The rally from 135.21 has been stronger than anticipated, but the origin of wave i at 137.01 is still unbroken. Under the Elliott Wave Principle second waves are allowed to correct 100% of the first wave, this is especially common in the currency market.

So at this point we are left undecided, whether wave B is in place at 137.01 or wave B still needs a rally higher to the 137.82 - 137.94 area in wave c of B. I slightly prefer the count, where wave B is in place at 137.01, but to prove this count, we need a break below support at 136.52 and more importantly a break below support at 136.04, that will call for the next impulsive decline to at least 134.09 and possibly even lower to 133.40 in wave iii.

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Elliott wave analysis of AUD/USD - Time to break out of the Diamond formation?

AUD/USD time to break out of the Diamond formation? 

The Diamond formation we have been tracking lately is getting close to its termination. I'm still looking for this Diamond to be a continuation formation, which means a break towards the downside for a decline to the long term target at 0.7384. 

That said, we have to be aware, that Diamond formations also can be reversal formation and if this is the case a break above 0.8833 will be the first warning, while a break above 0.8860 will confirm the formation has been a reversal formation and call for a rally higher to 0.9112. 

As said my preferred count is, that we should soon see a break lower, which would make this Diamond formation a continuation pattern, but we know the risk, this pattern carries. 

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Elliott wave analysis - USD/JPY wave iv ended at 106.76. Look for a rally to 111.25

USD/JPY wave iv ended at 106.76. Look for a rally to 111.25 

With an almost perfect test of the 38.2% corrective target of wave iii at 106.81 and the bottom of blue wave iv of one lessor degree, the odds for wave iv being over are very higher and I will now be looking for a break above 107.50 to confirm the bottom of wave iv for a rally to at least 111.25 in wave v and possibly even higher to 112.31.

Short term only a break below 106.76 will delay the expected upside rally in wave v.

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Elliott wave analysis - Ending diagonal support-line broken

Dow Jones Industrial - The ending diagonal support-line has been broken 

The ending diagonal support-line was broken at Fridays close and that calls for a decline to at least the origin of the ending diagonal at 14,719, but I will be looking for a much larger decline as wave E of  the expanded triangle should move below the March 2009 low at 6,470.11.

See my long term count from March 2012 here this count has served me well and kept me on the right track.

I have added the Detrend Oscillator as the support-line here broke to for the first time since the March 2009 low also confirming a long term change in the trend. 

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Elliott wave analysis of USD/INR - Inverse S/H/S bottom is building

USD/INR an Inverse S/H/S bottom is building 

I'm still looking for acceleration higher towards 63.49 and higher to 65.17, but we need to allow for the right shoulder to finish completely before the expected acceleration higher will take place.

From an Elliott Wave perspective, the rally since the late May low at 58.22 has developed nicely into a series of waves one's and two's. Once this phase of one's and two's is over, we should see a strong impulsive rally in wave three, with the first upside target being 63.49, but longer term even the August 2013 top at 69.22 should be exceeded.

Short term support will be found at 63.14, which ideally will protect the downside for the rally above the neckline resistance at 62.01, but only a break below support at 60.64 will be of concern.  

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Elliott wave analysis of NZY/JPY - Triple top triggered

NZD/JPY triple top triggered 

A major correction has unfolded in this cross since early February 2009. With the break below support at 85.69 a triple top has been triggered and we should see downside pressure mount for a test of support at 81.37 and strong support at 74.42 a break below the later will confirm a long term change in the trend and a new decline to below the ending point of wave A at 44.21.

We are of course talking many month before this low is broken, but I do expect a break below 44.21 for a continuation lower to 36.89.

Short term I'm looking for resistance at 85.69 and at 86.07, which ideally will protect the upside, but even if resistance at 86.07 should be broken it will likely only be able to produce a rally towards 86.55 before the downside pressure will take over again. 

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Elliott wave analysis on Soybean Oil - A nice triangle is building

Soybean Oil is building a nice triangle before lower to the 28.50 - 29.00 area 

Soybean oil is in a long term downtrend, which should ultimately take us to 19.10 (bottom of wave 4 of one lessor degree). However, we will not go there in a straight line and need a couple of swings on the way lower.

Currently a nice triangle is building, the triangle isn't finished yet, but we are getting close and once the triangle consolidation is over, we should see a thrust out of the triangle towards the downside for a continuation lower to the 28.50 - 29.00 area to end red wave v and black wave iii. This will set the stage for some kind of flat correction correction in black wave iv. As black wave ii was a simple zig-zag correction, we should expected some kind of flat black wave iv to unfold. It could also be a new triangle consolidation, but as triangles is made up of combinations of zig-zag's the first wave will be the same.

Once black wave iv is over in the 32.00 - 33.00 area we should look for the final impulsive decline towards 19.10 to end wave Y from 60.40.   

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Elliott wave analysis of FTSE 100 - Top confirmed at 6,904.85

FTSE 100 top confirmed at 6,904.85 

The break below the ending diagonal support-line, has confirmed the top at 6,904.85 and we should now be looking for a decline to the origin of the ending diagonal at 6,023.44, within half the time it took to build the formation. As it took 62 weeks to build the ending diagonal, we should expect a test of 6,023.44 no later than mid-April 2015.

More importantly, the top at 6,904.85 marked the top of the major corrective (B) wave from early March 2009 and we should now be looking for an impulsive decline in wave (C) lower to 3,461 in a major flat correction.

This is the third time the FTSE 100 index tops out near 6,900. In 2000 it topped at 6,935, in 2007 it topped out at 6,751 and now in 2014 at 6,904.85. Every top with a 7 year span. If we look at the bottoms, we can see that it bottomed in March 2003 at 3,278 and again in March 2009 at 3,765. If this sequence should continue, that will mean a bottom in March 2015... I do think a decline of that magnitude is unlikely in that short time frame and think it's more likely, that we will see a bottom in March 2016, but now we at least have an idea of the risk-scenario. 

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Elliott wave analysis of the All Ordinaries Index - Decline to 461 is developing

All Ordinaries a decline back to the origin of the ending diagonal at 461 is developing 

A couple of weeks ago we saw a break below the ending diagonal support-line near 547 and not alone does this break confirm the end to the major correction from March 2009 low, but it also gives us the first target towards the downside and a time estimate for hitting this target.

When an ending diagonal comes to an end (breaks below the support-line), the target will be a return to the origin of the ending diagonal, which in this case is at 461.06 and the time estimate will be, within half the time it took the ending diagonal to develop. As can be seen on the chart it took 62 weeks to develop the ending diagonal and therefore the 461 target should be reached within 31 weeks or around mid-April 2015. We could see the target of 461 hit before this date, but it should not be later than mid-April 2015. 

Longer term, I will be looking for a return to 382.94 and below towards the March 2009 low at 305.25, with the ideal target being 185.13, where wave [C] will be equal in length to wave [A].

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Elliott wave analysis of the DAX index - Possible S/H/S top building

DAX possible S/H/S top building 

The DAX index ended its major wave 5 in early July 2007 at 8,151.57 and we have since then seen wave (A) down to 3,588.89 in early March 2009 and wave (B) ended almost perfectly on the 138.2% extension target of wave (A) at 9,931.15 (the high came in at 10,050.98). I'm now looking for an impulsive decline in wave (C) lower to 2,693, where wave (C) will be 161.8% longer than wave (A), which is a very common target for an expanded flat correction.

The DAX is likely building a S/H/S top, with the left shoulder building from late October 2013 mid-March 2014 and the head building from mid-March 2014 to early August 2014 and since early August 2014 the right shoulder has been building. To activate this top-formation a break below the neckline at 8,903 is needed for a measured decline to 7,755, but that is the minimum target. The decline could easily be much larger and likely will be much larger as I expect an impulsive decline in wave (C). I would expect the break below the neckline to be seen in late October 2014. 

Looking at both the MACD and the RSI indicators, we have seen the classic divergence build since the top of the left shoulder to the top of the head confirming a clear loss of momentum during the last part of the rally. 

Elliott wave analysis of USD/SGD - How to channel your way to the perfect wave count

USD/SGD how to channel your way to the perfect count

Let me start by saying, that this method can't be used every time, but when it can, it will be a tremendous help.

Since the December 2001 high at 1.8558 we can see three well defined channels, which forms wave 1-3 and 5. All requirements to the decline is obtained. Wave 3 is not the shortest as wave 1 is shorter. Wave 3 and 5 is equal in length.

But you should notice another thing. Before the 2001 top, we can see a well defined triangle, notice how the triangles support and resistance lines later define long term support and resistance. The triangle resistance-line even turns to become the larger channel support-line, which catches both the bottom of wave 3 and 5 perfectly.

You don't get it more nicely than this.

With the wave 5 bottom in place at 1.1989 in July 2011 we should be looking for a major rally back to the top of wave 4 of one lessor degree, which in this case comes in at 1.5578. I will be looking for a break above 1.2700 as the first strong indication, that an upside acceleration will be seen, while a break above 1.3199 is needed to confirm the rally back to 1.5578.

Ideally support at 1.2475 will protect the downside for the break above 1.2700 and higher.

Elliott wave analysis of EUR/NZD - Accelerating higher towards 1.6407

EUR/NZD accelerating higher towards 1.6407

Since my last post (you can see it here), we saw the expected correction to 1.5717 (just below the expected 1.5736 target) before the correction was over and the next strong rally was ready to take over. We have seen a break above the base-channel, which calls for an acceleration higher towards the next target at 1.6407. However, the 1.6407 target will likely only be a minor stop on the way higher and the next major target will be found at 1.6830, which most likely will mark the top of wave 3.

Short term I expect support at 1.6033 will protect the downside for the rally higher to 1.6203 on the way higher to 1.6407. Even if support at 1.6033 is broken, a new support will be found just below at 1.5980.

Elliott wave analysis of AUD/USD - Next minor downside target is at 0.8805

AUD/USD next minor target at 0.8805

As always let's start with the long term chart. The monthly chart show that a major zig-zag (A-B-C) from April 2001 at 0.4814 ended in July 2011 at 1.1080. Since the 1.1080 high we have seen a corrective decline. Why is it only corrective? The decline in wave A is clearly in three waves on the daily chart (middle chart) and the B-wave is clearly a triangle, That means we have two waves of the larger degree telling us, that this decline only is a correction. At this point it's unclear whether we have seen wave C end at 0.8845 and the rally to 0.9758 was an x-wave or we are in a larger impulsive C-wave decline. Both counts seems equal likely at this point, so we will need to track the lower degree count for signs, which count is the correct one. No matter which count proves correct a decline to the long term pivot point at 0.8000 is in the Cards.

If we zoom in to the 4-hourly chart (the lower chart). we can see a clear impulsive decline from 0.9505, which as minimum should be equal in length to the decline from 0.9758 to 0.8656, which will give us a minimum target at 0.8403. If we are to see a larger correction from 0.8430 that likely would stay below 0.9250, then a triple zig-zag correction is the most likely outcome, with the third zig-zag should take us down to 0.8000. If however support at 0.8403 is broken like a knife cutting through butter, then the impulsive c-wave count is correct and even strong support at 0.8000 will have a diffeculte time holding back the decline.

The next minor target on the way lower to 0.8403 is found in the 0.8785 - 0.8805 area, likely closer to the 0.8805 than 0.8785, but then we are talking 20 pips, so it doesn't really matter, where the bottom of blue wave v will be found, as more downside will be seen once the minor correction in red wave iv is over.

Elliott wave analysis of Silver - Silver is leading the way lower

Silver is leading the way lower

Silver has clearly broken below its triangle support-line and the measured target from the triangle is near 12.90. Looking back this target is very close to the 2009 June and July lows at 12.43 and at 12.52. However, we should keep an eye on support near 13.58 as this is where the second zig-zag correction will be equal in length to the first zig-zag and it will also mark the distance, where wave v of C has travelled 38.2% of the decline from the origin of wave i to the bottom of wave iii subtracted from wave e of the triangle.

Short term we should see a back test of the broken triangle support-line, but once this minor correction is over, look for a new decline lower to 13.58 and maybe even 12.90.

Silver is clearly leading the way lower as gold its 2013 lows at 1,180 and 1,182, but is expected to break below these two supports for a decline closer to 972 and maybe even lower 887.

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Elliott wave analysis of ASX 200 - Top confirmed at 5,679.50

ASX 200 top confirmed at 5,679.50

Since the March 2009 low at 3,120.80 a major zig-zag correction has been unfolding. You might ask, why this is not just the first three waves of a impulsive 5 Wave rally higher? The clue is the C wave. Wave A of the 3,120.80 low to 5,025.10 was a strong impulsive rally and was followed by a simple zig-zag correction in wave B, but wave C higher from the B-wave low at 3,765.90 has been slow moving and not as dynamic as wave A, this is what we would expect for wave C of a zig-zag correction, but not wave 3 in an impulsive 5 wave rally. Wave C has taken almost 3 time as long as wave A to cover the same distance as wave A. The other clue is, that wave C is equal in length to wave A, which one would expect in a zig-zag correction, but not in an impulsive five wave rally. 

Now that we have confirmed, that the rally of the 3,120.80 low is only a correction, then let's look at the final part of the C wave rally. Wave v of C has become an ending diagonal (overlapping by wave one and four, which only is allowed for diagonals). The break below the ending diagonal support-line near 5,510 confirms that wave v of C is over and we should now look for a decline to the origin of the ending diagonal at 4,632.30 over the coming weeks.

When dealing with ending diagonals, there is a time-guideline, which can be a guide for us, when we expect the origin of the ending diagonal to be hit. The guideline states, that it would take only half the time to return the origin of the ending diagonal as it did to build the entire formation, which in this case means that the origin at 4,632.30 should be hit within 30 weeks or in early March 2015.
However, longer term I will be looking for a continuation lower towards the bottom of wave B at 3,765.90 and lower towards the March 2009 bottom at 3,120.80.

With the long term picture in place, we have a nice roadmap for the short term moves, that should keep us out of trouble for many months to come.

Elliott wave analysis of EUR/CAD - Close to its first target at 1.4313

EUR/CAD close to its first target near 1.4313

We have tracked this decline since the top of red wave ii on April 28 at 1.5306 and this count has worked to absolute perfection. Now we are just about to hit the first target for red wave v at 1.4313. This a nice decline of 926 pips at todays price at 1.4380. Many investors will not even be able to make this profit in a year.

We can count five clear waves down from 1.5586 and it will just be a matter of time before a correction towards at least 1.4730 takes over.

Short term a break above 1.4435 will be the first warning that a bottom could be in place, while a break above 1.4501 is needed to confirm the bottom for wave 1 and that wave 2 towards at least 1.4730 is unfolding.

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Elliott wave analysis of Gold - Expect a break below the triangle support-line soon

Gold expect a break below the triangle support-line soon

I think it was about time I updated the daily chart for gold, as one can loose sight of the bigger count, when looking only at the 4-hourly chart.

As can be seen, we have seen a test of the triangle support-line near 1,273 and this line has held for now, but it should just be a matter of time before, we will see a break below this line and more importantly a break below 1,240.20 (the low of wave d) confirming that wave 5 lower is developing.

With wave e and 4 in place I have re-calculated the targets for wave 5. The first target comes in at 1,060.20, where wave 5 will be 38.2% of the distance travelled from the top of wave 1 at 1,920.84 to the bottom of wave 3 at 1,179.83 subtracted from the top of wave 4 at 1,345.28. The next target will be the 50% target of this distance, which comes in at 972.77, which also happens to be the measured triangle target. The fact that we can calculate the 972.77 target in two different ways, make this the most likely downside target.

Short term I would like to see resistance at 1,291.70 protect the upside, but if broken it indicates that we saw a short term low at 1,272.75 and a correction towards the 1,297 - 1,303 area is developing before the next strong decline below the triangle support-line near 1,273. Only a break above 1,322.69 will delay the expected downside pressure.

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EUR/NZD - Wave 2 ended at 1.5693

EUR/NZD - Wave 2 ended at 1.5693

We where looking for a final decline in wave 2 to 1.5706, which was the 38.2% corrective target of the impulsive rally from 1.5398 to 1.5898. The minor spike below 1.5706 is a perfect ending of this wave 2 correction and we should now be looking for wave 3 higher towards at least 1.6187 and more likely even higher towards 1.6496.

Short term a break above minor resistance at 1.5830 and more importantly a break above resistance at 1.5866 will confirm that wave 3 is developing.

Only an unexpected break below 1.5693 will delay the expected upside for a move closer to the 50% corrective target at 1.5648, but the is not my preferred scenario.

EUR/JPY - Look for the final decline to 134.34

EUR/JPY - Look for the final decline to 134.34

As long as resistance at 138.01 holds firm, I will be looking for a final decline towards the equality target between wave A and C at 134.34.

Short term I'm looking for a break below support at 136.81 to confirm that the final decline lower to the equality target at 134.34 is developing. As we are locked in an expanded ending diagonal, this decline will likely not be a smooth easy to read decline...

Once the equality target is reached we should be ready for a new impulsive rally much higher.

USD/JPY - Wave c of the flat wave B-correction is likely over at 104.29

USD/JPY - Wave c of the flat wave B-correction is likely over at 104.29

I have been looking for a retest of the 104.13 high to end wave c of the flat wave B, with the test of 104.29 this is more than fulfilled and I will now be looking for a break below minor support at 103.81 and more importantly a break below support at 103.47 as confirmation, that wave B is indeed over and wave C lower to at least 99.30 is developing.

At 99.30 wave C will be equal in length to wave A, if the top is in place at 104.29. Short term the risk is a continuation higher to 105.44 in a larger flat correction. This is not my preferred count, but until we have proof, that wave B is over, this is the risk scenario.

GBP/USD - Wave 1 ended at 1.6534

GBP/USD - Wave 1 ended at 1.6534

Wave 1 extended slightly lower than the ideal 1.6579 target, but that does not change the overall need for a short term correction higher to at least 1.6844 (the top of wave iv of one lessor degree). A correction to 1.6844 will also be very close to the 50% corrective target of the decline from 1.7191 to 1.6534, which comes in at 1.6860.

Short term a break above minor resistance at 1.6597 indicates, that the correction in wave 2 towards 1.6844 is developing, while a break above resistance at 1.6679 confirms the correction.

FTSE 100 - Look for a continuation towards 6,816.52 before lower

FTSE 100 - Look for a continuation to 6,816.52
I'm still looking for wave B towards 6,816.52 before wave C lower takes over.

Wave A became an expanded leading diagonal and ideally we will see a break above the leading diagonal resistance-line to end the correction from 6,528.73 and set the stage for a impulsive decline in wave c to well be low 6,528.73.

Short term a break below support at 6,746.37 will confirm, that wave B is over and wave C is developing.

DAX - Wave iv has meet strong resistance at 9,470

DAX - Wave iv has meet strong resistance at 9,470

We have seen the expected rally to resistance at 9,470 just below the 61.8% corrective target at 9,501.77. Ideally we will see resistance at 9,470 protect the upside for a break below 9,291.93 confirming, that wave iv is over and wave v lower to 8,749.51.

Wave iv is alternating nicely from wave ii, which became an expanded flat correction, while wave iv is becoming a double zig-zag correction.

Crude Oil - Wave ii could be over at 94.45

Crude Oil - Wave ii could be over at 94.45

The break below the base-channel should provide more acceleration lower towards at least 86.48 and more likely even lower towards 73.50 longer term.

Short term the question is whether wave ii ended at 94.45 or we need a little more upside towards 94.83 and maybe even 95.32 before wave ii is over and wave iii lower can take over for a decline towards 86.48. Wave ii could easily be over at 94.45, but we will need a break below 92.94 and more importantly below 92.61 as confirmation.

Gold - Look for blue wave v lower to 1,262.96

Gold - Look for blue wave v to 1,262.96

The impulsive rally lower since the top of wave E of the major triangle at 1,345.28 is unfolding nicely. Short term I'm looking for a decline to 1,262.96 to finish wave i of (iii) lower. Once we have wave i in place we should look for a correction in wave ii towards at least 1,285.99 and more likely even higher to 1,293.10, but then we are in wave (iii) lower and we should always remember, that correction during third waves tend to be small or even sub-normal.

Longer term I'm still looking for much lower levels in wave 5 towards 1,086 and possibly even lower towards 1,002.

EUR/USD - Time for a correction in red wave 2

EUR/USD - Time for a correction in red wave 2

With a perfect touch down on the 61.8% target at 1.3182, we have most likely seen the bottom of red wave 1 and should be looking for a correction in red wave 2 towards at least 1.3380 (the 38.2% corrective target of the decline from 1.3701 to 1.3182). A correction to 1.3380 will also take us well back into wave iv of one lessor degree and close to the apex of the wave iv triangle, which is a very common corrective target. That said, we have to be aware that the expected correction easily can carry us higher towards the 50% corrective target at 1.3442, which also marks the top of wave iv of one lessor degree.

Short term a break above 1.3210 will be the first small warning that the bottom is in place, while a break above 1.3261 confirms the bottom for the correction to at least 1.3380.

I just want to add one important note. We are in wave (iii) lower and corrections during third waves tend to be small and even sub-normal.

AUD/JPY - Headed for 97.43 and maybe even 98.14

AUD/JPY - Headed for 97.43 and maybe even 98.14

The rally from late August at 86.41 has evolved into a triple zig-zag correction and we are currently in the last part of wave z. It's not possible to have more than a triple correction under the EWP, so once wave z is over we should be looking for wave C lower.

I'm looking for 97.43 as the ideal target for wave c of z, which is where wave c will be equal in length to wave a of z, but with the 61.8% corrective target of the decline from mid-April 2013 high at 105.43 to the late August 2013 low at 86.49 just above at 98.14 it might act as a magnet and prolong wave c of z slightly, but we should not expect much more upside for this B-wave correction.

EUR/AUD - Last decline towards 1.4074 developing

EUR/AUD - Last decline towards 1.4074 developing

The last decline towards the ideal target near 1.4074 is now developing. At 1.4074 we does not alone find the 38.2% corrective target of the rally from early August 2012 at 1.1605 to the late December 2013 top at 1.5597, we also find the low of wave iv of one lessor degree, which is a very common target for a correction.

Once at 1.4074 we should be looking for signs, that the B-wave correction is over and wave C higher is ready to take over, but for now we will stay focused on the downside and expect minor resistance at 1.4196 will be able to protect the upside for the next part of the decline towards 1.4074.

AUD/NZD - Break above the base-channel indicates acceleration higher

AUD/NZD - Break above the base-channel indicates acceleration higher

We have finally seen the long term expected break above the base-channel, which indicates acceleration higher towards 1.1754 as the ideal target for wave 3. At 1.1754 we will also find the 38.2% corrective target of the decline from 1.3793 in early March 2011 to the late January low at 1.0488.

Longer term I'm looking for wave C, which should be a impulsive rally (five waves) of this major flat correction, that has been unfolding since December 2006 (see the monthly chart below). This five wave rally should take back just above the March 2011 top at 1.3793.

Short term we will ideally see the base-channel resistance-line near 1.11 act as resistance, but only a break below support at 1.1043 will cause a delay in the expected uptrend.

EUR/CAD - Look for red wave v lower to at least 1.4313

EUR/CAD in red wave v lower to at least 1.4313

The decline from 1.5586 since mid-March has developed nicely and almost perfectly to my expectation. We saw an expanded flat in red wave iv, which ended at 1.4734 and was looking for strong evidence that red wave v lower was developing. The first strong indication was the break back into the falling channel and Fridays acceleration lower is another strong indication, that red wave v is well under way towards its first target at 1.4313. At 1.4313 red wave v will have travelled 38.2% of the distance travelled from the top of red wave I to the bottom of red wave iii subtracted the top of red wave iv.

Short term resistance at 1.4519 will protect the upside for the continuation lower to at least 1.4313 and possibly even lower.

GBP/AUD - Need to saty above 1.7733

GBP/AUD need to stay above 1.7733

If my working count is to stay valid, then we will have to stay above the bottom of wave 1 at 1.7733 for a break above minor resistance at 1.7830 and more importantly we need a break above 1.7948 to confirm the bottom of wave 2 to confirm that wave 3 higher towards 1.9238 and beyond is developing.

A break below 1.7733 will tell us, that all we have seen since April 10 at 1.7733 has been an X-wave and a deeper correction towards 1.7348 and possibly even 1.6781 should be expected.

Elliott wave analysis of the USD-Index - The target is at 82.21

USD-Index next target at 82.21

The rally from July 1 low at 79.75 has unfolded perfectly and is currently sitting just below the 82.21 target. At 82.21 red wave iii will be 361.8% the length of red wave i. But how do we know, that the 82.21 target likely will hold for a correction in red wave iv?

Well we don't for sure, that 82.21 will hold and turn the USD-Index lower in red wave iv, but beside the 361.8% extension target, we also saw a nice triangle formation as sub-wave iv of red wave iii and triangles tell us two things. First a triangle tells us, that once the formation is over, the underlying trend will be resumed (in this case higher, which clearly is what we have seen). Second a triangle formation tells us, that the next move in direction of the underlying trend will be the last of that sequence, before a correction takes over. So the rally to 82.21 should be followed by a correction.

Then what can be expected of this red wave iv correction? The first thing we will look for is a correction back to the bottom of wave four of one lessor (in this case blue wave iv, which comes in at 81.26). Then we apply the Fibonacci ratios to the rally from 79.75 to 82.21 and the 38.2% corrective target comes in at exactly 81.26, so now we already have to identical for red wave iv, when we have a cluster of target like this, we should always expect this target not only to work like a magnet, but also provide the necessary support to kick of red wave v higher.

For now we should keep our focus on the 82.21 target, but remember we are close to a short term top for red wave iii and a correction should soon follower in red wave iv.

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Elliott wave analysis of Crude Oil - Finally breaking lower

Crude Oil finally breaks lower

The downside break we have been looking for over the last couple of weeks finally materialized yesterday. Not alone did we see a break below minor support at 96.57 on the 8 hourly chart, but more importantly the break below 96.57 also meant we saw a clear break below the long term support-line back from January 2009 on the weekly chart, which will add considerably downside side pressure here.

Short term I will be looking for a test of 93.57 as the first possible target of wave (v) and I of 3, but if 93.57 is broken too, then we should be looking for an extension in wave (v) lower to 90.75. It's not uncommon for commodities, that the fifth wave extends.

However, longer term we should see an even strong decline towards in wave 3 towards at least 86.80 and possibly even deeper towards 74.02, where wave 3 will be 161.8% of wave 1 and at the same time meet the 50% corrective target of the rally from 33.22 to 114.81.

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Elliott wave analysis of GBP/JPY - Channel support broken, calling for a decline to at least 163.28

GBP/JPY moving lower to 169.45

We have finally seen the break below the channel support-line at 171.35, which confirms that wave C lower to at least 163.28 longer term.

We saw the top of the impulsive rally from mid-January 2012 at 117.26 at 174.85 in early January 2014 and has since seen an expanded flat correction unfolding. Wave B of this correction, did break slightly above the origin of wave A and therefore this correction is an expanded flat. Wave C should at least see a decline to 163.28 where wave C will be equal in length to wave A and wave C should unfold in an impulsive manner (five wave decline).

Short term we should see a break below 170.52 call for a decline to 169.45, but that should just be a minor stop on the way lower towards 163.28.

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Elliott wave analysis of USD/JPY - The b-wave triangle is almost over

USD/JPY - Wave b should be over soon

Since the 75.56 low ultimo October 2011 we have seen a nice five wave rally to 105.44 in mid-January 2014. We are currently correcting this five wave rally in a simple zig-zag correction. Wave a of this correction became an expanded leading diagonal and we are currently working on wave b. From the chart above it's clear, that wave b has become a b-wave triangle.
We are in the final staged of this b-wave triangle and should soon see a thrust out of the triangle towards the downside for a decline to 93.33, where wave c will be equal in length to wave a. At the same time we will find the 23.6% corrective target of the rally from 75.56 to 105.44 at 93.26.
With a cluster of targets in the 93.26 - 93.33 we should expect this area to protect the downside for the next impulsive rally higher.

However, for now we should focus on the final part of the final part of the triangle ending close to 102.94 for a strong decline in wave c towards 93.33.

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Elliott eave analysis of EUR/NZD - Impulsive five wave rally from 1.5398

EUR/NZD target at 1.5920

We have a nice five wave rally of the 1.5398 low. The ideal target for wave v of 1 is at 1.5920, we could of course see an extension higher towards 1.5965, but no matter what a minor top should be close by.

The five wave rally tells us, that we should expect only a correction, once wave v finally is in place. After the correction a new impulsive rally should be seen.

As we can count five nice wave up from 1.5398 and have a minor triangle as wave iv, we know that we are in the final move higher of this impulsive rally, before a correction lower to 1.5555 takes over.

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Elliott wave analysis of EUR/JPY - Wave iii ended at 135.73

EUR/JPY wave iii ended at 135.73

I was looking for a wave iii target at 135.48, but break above 136.46 told us, that wave iii ended a little early at 135.73. We should now look for wave iv towards red wave iv of one lessor degree at 138.00. It's very common for fourth waves to terminate close to a fourth wave of one lessor degree, which in this case would be red wave iv at 138.00, from where we should see the final decline to 134.34 to end wave C.

At 134.34 wave C will be equal in length to wave A from 145.69 to 136.23.

Short term we should allow for a correction to 136.20 before the final rally to 138.00 to end wave iv.

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Elliott wave analysis of USD/INR - The 161.8% extension target at 61.78 almost tested

USD/INR is almost testing the 161.8% extension target at 61.78

Since my last update on July 31, we have seen a perfect impulsive rally and is sitting just below the 161.8% extension target at 61.78 (the high till now has been 61.73). Even if we does see a set-back from 61.78, it should only prove short-lived and it should just be a matter of time before the next impulsive rally breaks right through resistance at 61.78 for a continuation higher to 62.93 and possibly even higher.

Short term support will be found at 61.19

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Elliott Wave Analysis of UNG (Natural Gas ETF) - Bottom in place soon

UNG (Natural Gas ETF) close to a bottom

Sorry for not having update the last couple of days, but I have been extremely busy keep the Elliott Wave Surfer Service up to date. We have seen a lot of action in the Market lately.

Since the February high at 27.89 we have seen a very complex double zig-zag correction, which should be very close to a bottom. Ideally we will see this wave IV end in the 20.12 - 20.42 area for a break above resistance at 21.95 being the first strong indication, that the bottom is in place for the next major rally higher to above 27.89 in wave V.

At this point only a break below support at 19.98 will be of concern as that will leave us with an overlap between wave I and IV, which is not allowed under the Elliott Wave Principle.

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Elliott wave analysis of USD/CAD - Alternate count in motion

USD/CAD alternate long term count in motion

On July 12 I showed you the possible long term alternate count, which would be put into motion if we saw a break above 1.0809, well we did see a break above that resistance yesterday, which shifts the odds to this long term alternate count. If we are expecting a much stronger USD it will make sense if CAD became weaker.

What should be expected from this alternate count? First of all, we can conclude, that wave C of the corrective rally from 0.9406 still is developing and we are in the early parts of wave 5 higher. The ideal target for this wave 5 will be in the 1.1639 - 1.1666 area, where we will find the 61.8% corrective target of the decline from the Marts 2009 high at 1.3063 to the July 2011 low at 0.9406, but wave 5 will also be 61.8% of the distance travelled from the bottom of wave 1 at 0.9633 to the top of wave 3 at 1.1278.

We will find some resistance at the 50% target of the distance travelled from the bottom of wave 1 to the top of wave 3 at 1.1441, but the target in the area between 1.1639 - 1.1666 seems more attractive.

Short term look for support at 1.0749 to protect the downside for the next rally higher.

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Elliott wave analysis of NZD/USD - Support-line near 0.8557 under fire

NZD/USD support-line near 0.8557 under fire...

After having pin-pointed the top to 0.8836 we have been looking for a strong decline. We saw the first five wave decline from 0.8836 to 0.8646, which was followed by a running flat correction and we should now expect extension in wave 3 lower. The minimum target for wave 3 is at 0.8411, but I think wave 3 will extend even further towards the 361.8% extension-target of wave 1 at 0.8030. Longer term we should ultimately see a break below the November 25- 2011 low at 0.7369.

Short term Resistance is found at 0.8597, which will ideally protect the upside for a continuation lower, but only a break above 0.8708 will invalidate the bearish long term count.

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