Elliott Wave Analysis of EUR/JPY - Wave 5 in motion for a rally towards 182.95

 

Elliott Wave Analysis of EUR/JPY - Wave 5 in motion for a rally towards 182.95

It' has been a while since I last reviewed EUR/JPY. On April 18 this year EUR/JPY was testing resistance at 164.17, which at that time I thought was the top of wave 3. However, it quickly turned out that it wasn't the top of wave 3, but rather the top of wave iii of 3 and more upside should be expected towards the next resistance near 175.66 which marked the 261.8% extension target of wave 1. 

Wave 3 peaked at 171.79 but the the B-wave of the following wave 4 tested the expected 175.66 target before a deep wave C dipped to test the low of wave iv of 4 and the 38.2% corrective target of wave 3 at 153.56. 

Wave 5 is now in motion and should see a rally towards resistance at 182.95 before completing the rally out of 2020 low at 114.20. 

Elliott Wave Analysis of Coffee - Next stop USD 300

 

Elliott Wave Analysis of Coffee - Next stop USD 300

Coffee completed a large triangle consolidation as wave Y of 4 in January 2023 and has since moved higher to test and break the triangle resistance-line near 250 and is now headed towards the next resistance at 300. 

If this resistance is broken and I expect it will be broken then the next long-term stop is see at 576. We will see the former tops at 318 and 340 give some temporary protection, but they shouldn't anything other that temporary stops before the match higher towards 576 is seen. 

That said, it's important what's gone happen near resistance at 300. If coffee fails to clear this resistance and starts to move lower again, we could see the the consolidation from 1977 continue for another 22 years as the final corrective wave "Z" unfolds. This is not my preferred count, but an option we can't exclude at this point in time. 

The job is to find the possible future path for coffee, which for now is up towards 300 and then let's evaluate the most likely future price-action for coffee. 

 

Elliott wave count for Crude Oil - Bottom could be in place

CRUDE OIL 

Elliott wave count for Crude Oil - Bottom could be in place

After a 2½ year decline from the March 2022 peak at 130.50 crude could finally could have found a bottom a new strong rally could in front of us. 

If a bottom is in place, we should see support at 63.64 protect the downside for a above minor resistance at 73.82 and more importantly a break above resistance at 77.60 that will confirm that wave 2 have completed and a strong wave 3 is in front of us for a really above 130.50

If, however support at 63.64 is broken, then the corrective decline from 130.50 remains in place for a decline towards 45.09 before the corrective decline from 130.50 completes and a new impulsive rally should be expected.   

Silver shows a giant cup with handle formation

 

Silver - Giant Cup With Handle

I have been tracking this giant cup with handle formation for years now. There is still a long way to this formation is triggered, which it will be if silver breaks above resistance at USD 48. Such a break will call for a continuation higher to around USD 100 pr. ounce silver. 

If, however you look closely on the smaller formation build from ultimo 2012 and till today you will see a smaller cup with handle formation, that just has been triggered with the break above resistance at USD 28 and this formation calls for a rally higher to test the long term resistance at USD 48. 

I expect that silver after some sideways consolidation between USD 28-30 will start rallying higher towards USD 35 as the next resistance and ultimately higher to test the long-term resistance at 48. 

 

US 10Y - US 2Y Yields About To Cross Back Over The Zero-line - Recession Coming

US 10Y - US 2Y Yield

Every time we have seen an inverted yield-curve, that turns back above the zero-line the US economy enters into recession. We saw a reversion from the inverted yield-curve back to normal in 1989; 2001 and 2007. Every time a recession followed in the US. 

The US 10Y - US 2Y yield-curve has been inverted since July 2022 which is the longest period ever and it will likely trigger a serious economic recession in the US once the yield-curve break back above the zero-line. 

In physics we have the law of action and reaction. Newton's third law states that "For every action there is an equal and opposite reaction". As the central banks has printed money as there was no tomorrow, creating enormous wealth. We should expect and equal strong force destroying the wealth created.

I'm not saying the recession has begun or hard times for the economy has begun, as I expect the central banks will do almost everything in the power to obstruct economic hard times. What I'm saying is that the US is facing strong head-winds in the months to come and eventually will enter into a strong recession down the road.

Don't be on the wrong side of the coming downturn.      

End of the Petro-Dollar

 

I missed this news story at first, but it caught my eye yesterday. I think it's interesting that the news more or less has ignored this story, because it's huge. 

Of cause some of the oil from Saudi Arabia still will be sold in US-dollars, but it might only be a minor part of the oil. The rest will be sold in EUR, YEN and Chinese RMB etc. 

As the article says, it has been one of the corner stones in the US economy and this corner stone has now been removed. It doesn't necessary make the card-house fall, but it makes it much more vulnerable. 

Over the last few years, we have also seen a decline in other major countries buying Treasury bonds. A role that the Federal Reserve has taken over instead, but it does weaken the US-dollars position as the main reserve currency. Losing the position as the main reserve currency will weaken the US in the long run and heightens the risk of global tensions in the years to come. 

I'm not convinced, that the US will be willing to give up its status as the global power number one without some kind of fight. 

I do expect that the coming years could bring about a major upheaval, that will shift the status of the US as the largest global power to someone else, but it will not be a smooth transition, that's for sure.   

Elliott Wave Analysis of the 10Y US Treasury Yield - Wave C down to 3.23% is in motion

Elliott Wave Analysis of the 10Y US Treasury Yield - Wave C down to 3.23% is in motion

In my April 15 post I called for a top near 4.59% to complete wave B and then a decline in wave C towards strong support near 3.23%.

We have seen wave B peak at 4.74% and wave C is now in motion with the 3.23% target as the goal. 

Resistance is now seen at 4.51%, which is expected to protect the upside as wave C make its way lower towards the 3.23% target. 

The decline in rates will likely spark a money-bowering frenzy and finally push the economy over the brink and start a 4 year economic decline. I expect this economic decline to happen in the early part of 2025. 

Elliott wave analysis of EUR/JPY - Wave 4 correction is ongoing

Elliott wave analysis of EUR/JPY - Wave 4 correction is ongoing 

EUR/JPY broke out of the 12 year triangle in December 2020 and has since rallied nicely to test resistance at 164.17 which marked the 161.8% extension of wave 1. With wave 3 in place I'm looking for a more prolonged correction in wave 4 and ultimately a decline to test support at 151.67 before wave 5 takes over and pushes EUR/JPY to new highs and ideally a rally towards 195.43 where wave [A] and [C] will be equal in length. 

  

Elliott Wave Analysis of the US 10Y Yield - Has likely peaked with the test of 4.59

Elliott Wave Analysis of the US 10Y Yield - Has likely peaked with the test of 4.59

In my March 1'st post I called for a rally towards 4.48% and expected a peak nearby. We have now see the 10Y US Treasury bonds run to a high of 4.59% and I expect that we have seen wave B peak and wave C now should take over for a decline towards support near 3.23 from where the next strong rally is expected. 

We will need to see a break below support at 4.34% to confirm that wave B has peaked and wave C is in motion. 

 

Elliott Wave Analysis of Gold - Next upside target seen at 3,100

Elliott Wave Analysis of Gold - Next upside target seen at 3,100

If gold closes the month of March above 1,972 then gold should be headed for 3,100 as the next upside target. 

That said we do see a real possibility of a run-away market as wave V finally gathers upside momentum and run-away markets in the fifth wave in the commodity complex is more the rule that not. 

So keep an eye on gold in the month ahead as it could be the focus of attention. 

Silver is currently lagging the rally in gold, which is uncommon, and I expect silver to gather momentum alongside gold and eclipse important resistance at 30,00 for a continuation towards the former all-time high at 50,00.  

 

Elliott Wave Analysis of Crude Oil - Neckline broken Rally to 95.03 next

Elliott Wave Analysis of Crude Oil - Neckline broken Rally to 95.03 next  

In my February 23 post I showed the possible S/H/S bottom and said, that a break above the neckline would call for a rally towards 95.03. This rally is now in the cards as the neckline has been broken and the S/H/S-bottom formation now is activated. 

Longer term a rally closer to 129.30 is expected, but let's take the coming rally in baby-steps and first look for the S/H/S-bottoms target near 95.03. 

US 10Y Yield Should Peak Near 4.48

 

US 10Y Yield Should Peak Near 4.48

In my December 20 post (You can see that post by clicking here). I called for a corrective rally for the US 10Y yield towards 4.51%. Well we could see a rally close to 4.51%, but a more likely target is seen near 4.48% from where we should see wave C take over for a decline towards support in the 3.23 - 3.38 area. 

Short term a break below minor support at 4.06 will indicate that wave B has completed and wave C lower towards 3.38 is in motion. 

Elliott Wave Analysis - Crude Oil In a S/H/S Bottom

Elliott Wave Analysis - Crude Oil In a S/H/S Bottom 

Crude oil is currently in a S/H/S bottom, that will be triggered upon a break above the neckline resistance at 79.29 and a break above here will call for a rally towards the 95.03 high. This high should only prove to be a temporary stop on the way higher towards the 129.30 high. 

Support is currently seen at 75.52 which is expected to act as a solid floor for the break above neckline resistance. 

 

Elliott Wave Analysis - EUR/USD Headed for 1.2860

Elliott Wave Analysis - EUR/USD Headed for 1.2860 

In my February 5 post, I called for EUR/USD to move lower to test support at 1.0760. We have seen a low 1.0695 before EUR/USD bottomed and turned higher. Perfectly on the cycle low on February 14. 

I will now be looking for EUR/USD to break above minor resistance at 1.0898 to confirm that wave (2) indeed has completed and wave (3) higher towards 1.1830 is in motion. At 1.1830 wave 3 will be 1.618 times the length of wave (1), however, I wouldn't be surprised to see wave (3) extend ever further towards 1.2505 where wave (3) will be 2.618 times the length of wave (1) and maybe even closer to the 3 times extension of wave (1) at 1.2860.

Look for EUR/USD to gain upside momentum in the weeks ahead. 

AI Mania Is Here

 

Welcome to the AI mania. If you can remember the late 1990's and the dot com boom, this was what it looked like. and it will not end well. 

Now it's just a question whether this mania will end during 2024, 2025 or maybe it will last all the way to 2026? 

I don't know, but when it ends "Oh dear"...

Super Boom - DJI in 38,820 in 2025

Super Boom - DJI in 38,820 in 2025

In 2011 Jeffery Hirsch released his book "Super Boom". The main theme of the book was that Jeffery expected the Dow Jones Industrial Index to hit a high of 38,820 in 2025. 

Jeffery build the case on the back of his father, who made a similar call back in 1974 when the DJI was at 570 to rally 500 percent to 3,420 by 1990 which is did. 

Well the Hirsch family did it again as the DJI just hit an all-time high of 38,927 on February 2024. Well it was a year early, but I personally will not hold that against him. 

We do see a clear divergence from the RSI, where the RSI indicator no longer confirms the high made in the DJI. Price has hit the upper resistance-line of the price-channel and finally a five wave rally can be counted from the 1932 low at 40,56. So the possibility of a major top in 2024 or 2025 is higher and should result in a lager correction towards 18,640 as we approach the end of the century should not come as a surprise.

That said, it's also important to stress, that once the correction is complete more upside is expected and a new major rally is in the cards. 

So hats off for Jeffery Hirsch call back in 2011. 

 

Elliott Wave Analysis of EUR/USD - Close to a bottom near 1,0760

 

Elliott Wave Analysis of EUR/USD - Close to a bottom near 1,0760

In my January 24 post I call for a continuation lower towards support near 1,0724 and we still could see this support tested, but we might not see EUR/USD reach that support, as we see a support just above at 1,0760 too, which could be enough to complete wave (2) and set the stage for the next impulsive rally in wave (3) higher towards at least 1,1885 and likely higher. 

Short-term a break above minor resistance at 1,0898 will confirm that wave (2) has completed and wave (3) higher is in motion.  

Technical analysis of the US 10Y - US 2Y Yield vs. S&P 500

 

US 10Y - US 2Y Yield vs. S&P 500

The chart above show the US 10Y - US 2Y yield (the red line) and the black line is the S&P 500 index. 

When the US 10Y - US 2Y yield returns above the zero mark. After having inverted, been below zero percent. We see a larger reaction to the downside in the S&P 500 index. We have seen the US 10Y-2Y yield cross below zero in 1989, 2000, 2006 and in 2022-2024. From the cycles we can see the the inversion bottomed exactly as expected in June 2023 and the inversion between the US 10Y and US 2Y yield has become less deep, but it still hasn't broken back above the zero mark indicating a return to the 2.64% mark, which has been the minimum seen after each normalization from an inversion. 

Once the zero mark is regained we should also expect a larger correction in the S&P 500 to be seen. 

We are not quite there yet, but it will not take much to force a break back above the zero mark indicating a larger correction in the S&P 500 taking place and a return to the 2.64% mark for the US 10Y - US 2Y yield.  

Elliott Wave Analysis of EUR/USD - Wave (2) Is Headed For Support at 1,0724

 

EUR/USD - Wave (2) is headed for support at 1,0724

The zig-zag correction from 1,1139 continues to follow the expected path towards support at 1,0724 where I expect wave (2) to complete and wave (3) to take over for a strong rally towards the 1,2800 - 1,2860 area. 

Resistance is now seen at 1,0916 and a break above here will indicate that wave (2) completed early and wave (3) already is unfolding. 

Elliott Wave Analysis of EUR/USD - More downside pressure to 1.0724

 

Elliott Wave Analysis of EUR/USD - More downside pressure to 1.0724

In my January 2 post I called for a temporary consolidation before renewed downside pressure. This outlook remains firmly in place. 

The expected consolidation has likely completed and renewed downside pressure should be expected in the weeks ahead towards the ideal target at 1.0724 from where I expect the next impulsive rally to take hold. 

The USD is normally firm in January, which once again has proven to be the case in January 2024, but this should just be a temporary thing and ultimately EUR/USD is expected to rally towards at least 1.2800 in circle wave 3. 

Elliott Wave Analysis of USD/JPY - Flat Correction Unfolding

Elliott Wave Analysis of USD/JPY - Flat Correction Unfolding

USD/JPY saw the completion of an A-B-C rally up from the 2011 low at 75.56 with wave A completing at 125.85 in June 2015. 

Wave B was a triangle that completed at 103.52 in January 2015 and finally wave C rally higher to test the equality target between wave A and C at 151.43 in October 2022. 

Since the 151.43 test we have seen wave A and B of a flat correction wave C is now unfolding. We need a break below support at 140.98 to confirm that wave C is unfolding, but it should only be a matter of time before this support breaks and USD/JPY continues lower towards support at 126.19 and maybe even slightly lower. 

Once wave C is complete This will likely be an X-wave, but only time will tell. 

JPY should be once of the best performing currencies in Q1-2024.  

Elliott Wave Analysis of The Shanghai Composite

Elliott Wave Analysis of The Shanghai Composite

The Shanghai Composite have been developing a triangle since the peak at 6,124 in 2007. 

The final wave - Wave E - is currently developing and should ideally see a decline to test support near 2,642 before the next strong impulsive rally in wave (C). 

The first strong indication that wave E has completed will be upon a break above resistance at 3,242 that would call for a rally firmly above the 2007 peak at 6,124. 

As long as resistance at 3,086 is able to cap the upside, the pressure will remain towards the downside and a likely decline towards 2,642. 

Elliott Wave Analysis of EUR/USD

Elliott Wave Analysis of EUR/USD

HAPPY NEW YEAR 2024!

EUR/USD is now in circle wave 3 higher. After an expanded flat circle wave 2 we should expect an extended rally in circle wave 3, which means a rally to at least 1.2962, where circle wave 3 will be 161.8% the length of circle wave 1. That said, I would not be surprised to see circle wave 3 extend further towards the 261.8% extension target at 1.4516. 

Short-term I will be looking for a minor correction in wave (2) towards support at 1.0724 before the next strong push higher in wave (3) towards 1.3555. 

Just a side note. The USD tend to be towards its strong side in the month of January, which also favor a temporary correction in EUR/USD towards 1.0724 before higher again.