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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Elliott Wave analysis of EUR/USD - Long term trend-line support broken

EUR/USD break below the long term trend-line support seen

We have seen the first daily close below the long term trend-line support, which indicates much more downside to come. We already had an impulsive count towards the downside, so the break below the trend-line support is no surprise and just confirms, what we already was looking for.
Short term we will be looking for a decline to 1.3444 as long as minor resistance at 1.3478 protects the upside, but the short term downside pressure is maturing fast and from 1.3444 or upon a break above 1.3478 look for a correction towards 1.3500 and likely even 1.3528 before lower again. 

Remember that corrections during third waves tend to small or even sub-normal.

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Elli0tt wave analysis of Coffee - Possible alternate count in action

Coffee gained 5.22% Friday

Coffee has more or less behaved like an Elliott Wave textbook chart since late April, but something out of the ordinary happened Friday last week. We saw a major gain of 5.22% and that was not what the textbook normally would have us to expect, so maybe something else than first expected is going on here.

Instead of blue wave (ii) being over at 185 in late June, it could be that it was only wave a of blue wave (ii) and the decline from 185 to 159 was b of blue wave (ii) and now we should be looking for wave c of blue wave (ii). If this is the case, then we should first of all see a break above 175, which would call for wave c higher to 191 to end blue wave (ii) and set the stages for blue wave (iii) lower to 103.

However, if resistance at 175 protects the upside for a break below support at 163, then look for a strong decline 97 in blue wave (iii).

For now we will have to stay flexible and let the market tell us, which count is correct.

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DJI and S&P 500 - Non confirming tops

DJI and S&P 500 non confirming top

Yesterday we saw another new all-time high for the DJI index and once Again the S&P 500 index did not confirm the top. We have now seen four new all-time high days in the DJI, which has not been confirmed by the S&P 500. Non Confirmation is an old but quite reliable signal.

However, trusting this signal alone is not advisable, therefore I would like to see a break below the ending diagonal support-line near 16,915 and more importantly a break below support at 16,805.38 in the DJI as Confirmation, that a top is in place here.

For the S&P 500 index I would like to see a break below support at 1,952.86 and more importantly a break below support 1,944.69, which will indicate that a top is in place.

Once the tops are confirmed, that should terminate the rallies from March 2009 and we should be looking for major declines.

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Elliott wave analysis of EUR/GBP - Long term target reached, look for a bottom soon

EUR/GBP at its long term target, bottom should be seen soon

With a low printed at 0.7887, we are just 4 pips above the target-area between 0.7868 - 0.7883. Whether we will see a perfect test of the target-area or not it not important to my, what's important is, that a long term bottom should be expected soon for a major rally.

The first strong indication of a bottom being in place, will be a break above minor resistance at 0.7920 and more importantly a break above resistance at 0.7980, which will confirm that a bottom is in place for a rally to at least 0.8155 on the way higher to 0.8467 and higher.

You might wonder, why I expect a long term bottom in the 0.7868 - 0.7883 area?

The first reason is, that at 0.7883 wave 2 will have corrected 88.6% of wave 1. Second waves area allowed to correct 100% of wave 1, but a bottom will often be found near the 90% corrective target.

The third reason is, that we can see a clear divergence between price (making new lows) and the indicators (not making new lows). This is a sign of loss of momentum and tells us, that a bottom could be seen soon.

All together indication of a possible bottom being in place soon. Only a break below the starting point of wave 1 at 0.7763 will invalidate the long term bullish count. 

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Elliott wave analysis of Brent Crude Oil - Downside thrust of the triangle should be seen soon

Brent Crude Oil triangle support about to be broken

Brent crude oil has been locked within a triangle consolidation since the mid-2012, but it should just be a matter of time before the triangle support is broken and the next decline towards 81.56 is seen. A break below the triangle support-line at 106.27 will call for a decline to 103.95 and 96.75 as the next targets on the way lower to 81.56.

If the triangle support-line is able to cause a correction more, then expect resistance at 107.76 to protect the upside for the next attempt to break below the triangle support-line.

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Elliott wave anlaysis of the USD-Index - Expect a strong rally soon.

USD-Index has broken above resistance and a minor invers S/H/S formation has been triggered
 
After a nice 61.8% correction of red wave i to 79.75, we have following seen a break above the resistance-line from the 81.02 high and at the same time a small invers S/H/S formation has been triggered, this tells me that red wave ii is over and red wave iii is developing.

Third waves is normally the strongest of the impulsive waves and therefore I would always expect extension to happen during the third wave. Extensions can also be seen in the first and the fifth wave, Just look a little to the left, and you will see that during red wave i it was the first of the sub-waves (blue wave i) that extended. The minimum extension I would look for is the 161.8% extension of wave one. It can be discussed whether this represents a real extension, but this is the most common extension you would see. If this target is broken clearly the next real extension target is the 261.8%, but you should always calculate the 200% extension target too.

If we calculate the 161.8% extension target of red wave i that would give us a target of 83.17, but as you can see red wave iii is already being sub-divided into smaller waves and we already have blue wave i and ii in place, which means, we can calculate the extension targets for blue wave iii and the first extension target is at 80.97, where blue wave iii will be 161.8% of blue wave i. As I said above, blue wave iii could easily extend further, but there is no way to tell how far it will extend, so all we can do, is keep a close eye of the structure of this rally.

As said before, not only has the resistance-line been broken, but a small invers S/H/S bottom-formation was trigger yesterday, which also is a very strong indication of a change of the smaller degree of trend from down to up. That said, an even bigger invers S/H/S bottom could be developing and a break above the neckline near 80.30 will activate this formation for an even bigger rally.

This is as bullish a configuration that you can get and expect a strong rally higher soon.  

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Elliott wave analysis of NZD/USD - Top finally in place?

NZD/USD Finally at the top?

First looking at the daily chart we are just a few pips away from the August 2011 high at 0.8843. If we then zoom in on the price action since February 2014 we can see a clear five wave rally is wave C of Y. If we measure the distance from the bottom of wave 1 to the top of wave 3 and calculates 61.8% of that distance and add this to the bottom of wave 4 then we get a target of 0.8836 (just below the August 2011 high). This cluster of targets should be able to protect the upside, but then I would like to see some evidence of a possible top and the first thing would be a strong reversal lower through support at 0.8775 and more importantly below support at 0.8708 confirm that a top is in place.

By the way, the 61.8% target was tested in early trading today, so keep a close eye on this cross for signs that a top might be in place.

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Elliott wave analysis of USD/CHF - Expect acceleration higher soon in wave

USD/CHF expect acceleration higher soon

We have seen a nice five wave rally of the 0.8858 low and after a minor correction to 0.8925, which ideally will protect the downside for the next rally higher to 0.9037 on the way higher towards 0.9400 and 0.9839 as the next major upside targets.

Should the minor support at 0.8925 be broken, when expect only slightly more downside price-action closer to 0.8894 before renewed upside pressure takes over again.

Only an unexpected break below 0.8858 will delay the expected upside for a move slightly lower to 0.8829 before higher again.

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Elliott wave analysis of DJI - The ideal target of 17.094 is still in sight

Dow Jones Industrial Index - Target at 17,094 still in sight

Turned down from 17,074.65, but as long as support at 16,871 protects the downside the ideal target at 17.094 still is in sight. That said, we have to be aware, that all requirements now have been fulfilled and a top could be found at any time now, but to indicate that a top is in place a break below support at 16,746 is needed. Only a break below this support, will be the first indication that not alone the rally from early October 2011 is over, but the entire rally from early March 2009 has come to an end.

I'm still regarding the rally from 6,470.11 in early March 2009 till now as wave D of an expanded triangle (megaphone pattern) and wave E of this pattern is still missing. This means, that once wave D finally is over we should expect a powerful decline in wave E lower. This expected E wave could make it all the way down to 5.600 by late 2016, but we might not need a decline as deep as that, but only time will tell.

For now we should still focus our attention towards the upside, but the top is getting pretty close at hand now.

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Elliott wave analysis of GBP/JPY - Top in place at 175.39?

GBP/JPY top in place at 175.39?

All requirements for a top being in place at 175.39 has been fulfilled, all we need now is a break below support at 174.42, to give us the first strong indication, that the top is in place at 175.39.

That said, we have to respect the uptrend as long as support at 174.42 protects the downside. But even if support at 174.42 will be able to protect the downside for a new high above 175.39, the possible rally should be very limited.

My preferred count is that we already has seen the high for wave B of the flat correction and wave C is about to develop, but we need some hard evidence that the top is in fact in place. Once the top of wave B is confirmed look for a powerful decline in wave C to below 163.82.

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Elliott wave analysis of USD/JPY - Wave E of the triangle is almost over.

USD/JPY wave E of the triangle is almost over

Well the expectation of a bigger triangle unfolding has well founded and we are now well into the target-area between 101.81 - 102.20. As long as minor support at 101.70 protects the downside, we could still see a move closer to 102.20, but we are very close to a top now and should not expect to much more in regards to the upside.

Once wave E of the triangle is over we should see renewed downside pressure for a thrust out of the triangle towards the downside for a decline to at least 98.38.

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Elliott wave analysis of EUR/NZD - X-wave bottom in place?

EUR/NZD  X-wave bottom in place?

With the low at 1.5479 (just above the 78.6% corrective target at 1.5460) the odds favour a long term bottom being in place, but we still need some hard evidence, that this is in fact the case. The first good evidence will be seen with a break above support at 1.5706 and of course if we can count a nice small five wave rally of the 1.5479 low.

As of yet we only have as possible wave 1-2/(i)-(ii) count, but a nice acceleration above 1.5650 and of course 1.5706 will add a lot of confidence in the bottom count.

Once we have confirmation of a long term bottom being in place we should be looking for a major rally above the August 2013 high at 1.7274

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