AUDUSD Could Make A Corrective Bounce Back to 1.0465 Before Turns Bearish Again

AUDUSD reversed nicely lower yesterday and already made a new swing low, which means that pair has now five wave down from 1.0600 high, called an impulsive wave. In Elliott wave theory impulses show direction of a current trend. As such, we are ready for more aussie weakness but could see a corrective retracement back to 1.0465 before downtrend resumes. There is a Fibo zone around 1.0370 and December low just beneath it that could cause a bounce.

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EURGBP Is Up More Than 5% Since Start Of the Year, But Structure Is Calling For More

EURGBP is trading sharply higher, now already up around 5.8% since start of January and it seems that current bullish trend will not end anytime soon. This traders, is the nice example of an impulsive pattern in action. We are tracking red wave 3) which is a five wave pattern; now with sub-wave 5 in progress which still has a room for a 0.8650 or even 0.8700 before we may get a larger, but still only a corrective retracement.

What is an impulse?
Impulse is the most common motive wave. Its a five wave pattern in the direction of a trend.

UPDATE II GBPUSD: Pull-back In Progress

Pound is already recovering about we warned you yesterday when we highlighted a five wave fall in wave 3). Notice that current prices are already testing upper trend-line of an impulse channel. Break of this line usually confirms end of a wave 3). In our case it means that market is in a temporary recovery mode, ideally in wave 4 which will retrace back above 1.5800 possibly even to 1.5900 level in sessions ahead.
Larger trend however is still down, but we need to see a completed three wave rise in 4) before we may look for weaker GBP again.

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S&P500 Could See 1500 Break Before Deeper Retracement

S&P 500 is trading nicely higher for the past few weeks, clearly in impulsive fashion form 1400 swing level. However market is approaching some important Fibonacci levels just above 1500 psycho level so we could see a sizable pull-back from there, but only in a corrective formation. In such case that would be wave 2) as labeled on the chart below. But before that we need to see end of red wave 1). We need to scroll to lower time frames to see the structure within wave 1).

The lower time frame chart (1h) suggests that red wave 1) is still incomplete and that market will most likely make push above this week. Notice that price slowed down in sub-wave 4; ideally forming a flat formation with nice key support area around 1490 which could give you a chance to join a larger trend. Stop-loss/critical zone is below 1475.

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Gold Intraday! Forecast

Jan 29, 2013. Gold is in correction form toward 1670 area.
Buy Gold at/above 1655. Stop Loss at 1652 Target: 1670
Sell Gold at/below 1650. Stop Loss 1655 Target: 1635

GBPUSD: Price Could Retrace To 1.5800-1.5900 Within Larger Downtrend

Pound is falling sharply for the past two weeks from 1.6180 Jan 11 swing high. Notice that decline from that high can be easily counted in five waves. That’s called an impulsive structure which represents huge red wave 3) which is part of much bigger five wave decline started back on Jan 2nd. Therefore we expect much deeper levels on cable, but not just yet. In fact, we think that before market breaks lower again we will see a corrective bounce in wave 4), ideally back to 1.5800-1.5900 range before new sell-off begins. Pair is also approaching some strong Fibo support for current third wave; its 1.618 x wave 1) measured from wave 2) high which very often reacts as a turning point at the end of a third wave. In our case that’s comes in at 1.5650. Bottom line: watch for a corrective bounce in 100-200 pips before new leg lower.

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Euro-Crosses should Extend Even Higher In Risk-On Environment-Elliott Wave

USD has been trading higher against its rivals during the Asian trading hours.  AUD, GBP and CAD are still one of the weakest while JPY is trying to find some support for the near-term. Larger picture of the markets remains unchanged but still very messy.

Below we have an overlay chart between some major FX currencies compared to S&P Futures and Crude Oil. We can see a strong negative correlation between FX pairs where only the EUR is moving higher in-line with risk-on assets, such oil and S&P.  Honestly, we do not like divergences too much, especially not between aussie and S&P which in fact could be signaling for a coming pull-back on stocks.

Overlay-Daily

Anyhow, traders need to trade what they see and not what they think, so at the moment looking for longs on EUR-crosses should be the best choice.
Below we are looking at EURCAD which is trading higher in wave (iii) that may slow down around 1.3630. Ideally we will see a fourth wave pull-back from there and back to 1.3500 which could be a long opportunity for short-term traders to catch wave (v) rally.

EURCAD 1h

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Elliott Wave Outlook For EURUSD and GBPUSD

Elliott Wave Outlook For EURUSD and GBPUSD

EURUSD

EURUSD finally broke to the upside which was expected after few days of a sideways price action in a shape of a triangle pattern. Pair already passed 1.3400 resistance level which now opens the door for 1.3500 or even 1.3550 level for the next few days. Trend is bullish as long as market trades above 1.3260. Meanwhile any pull-back to 1.3350 should prove corrective.

GBPUSD

Pound fell to a new low against the USD and slowed down just 5 pips from 1.5750 projected level, highlighted yesterday.  Notice that pair now has five waves down from 1.6180 which is the first evidence of a coming bounce, especially if we respect the bullish divergence on the RSI. Larger pull-back however could prove corrective and may stop at 1.5900 swing level that will may react as a resistance.

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Silver: Corrective Pull-back Within Uptrend

Silver has been in the uptrend-mode since start of January and it seems that bullish momentum has started to weaken from 32.45 peak. This however is not a surprise as market completed a fifth wave of a five wave sequence. In Elliott Theory we know that after every five waves correction follows. The interesting thing is that corrections usually starts after a divergence between wave 3 and wave 5 highs like in our case as shown on the MACD. Elliott Wave technicians will also know that corrections are structured minimum by three waves, so traders should be aware of a larger and deeper A-B-C pull-back possibly even back to 31 figure, near 38.2% retracement and Jan 17 swing level. After a completed three wave fall traders should again be on the watch for a bullish turn.

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Crude Oil Intraday! Heading toward wave V

Oil prices spiked up yesterday, closed to $97 per barrel before price turned sharply lower during the US trading hours. Looks like prices are capped now below 96.85 and ready for a deeper pull-back. We see market in minor fourth wave now from where extensions could follow to 94.80 later today. Any fast intra-day shorts should have stops above 96.15 critical region. Why? Because we know that wave four must not trade in to a territory of a wave one.

EURUSD Remains Trapped In Range, But Triangle Is Pointing Higher

Canadian dollar was one of the weakest yesterday after BoC leaved rates unchanged at 1% due to weakness in the economy and lowered GDP expectations for 2013 from 2.3% to 2.0%. IMF also lowered global growth for 2013 but markets did not move much after the announcement. Most of the FX pairs and major commodity markets are trading sideways while stocks keep pushing higher. S&P500 slowed down yesterday 4 points ahead of 1500 psychological level.

EURUSD tested 1.3250/60 support few sessions back from where we could see push higher today after just released better than expected German PMI numbers 48.8 vs. 47.1 expectation, but still in a contraction zone.

From an Elliott Wave perspective EURUSD still could be forming a triangle in wave four, but it’s hard to call the end of it. We need some impulsive reactions out of the path before direction of the pair can be confirmed.

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S&P 500 Is Aproching 1500 Psycho Level-Could See A Pullback From There

We are sure that stocks traders have some very good time these days when markets are up day by day. We were successfully tracking this impulse up on S&P500 over the past few days which may not end anytime soon. But you however should be aware of a possible corrective pull-back from 1500 psychological level.
From an Elliott wave perspective we have five waves up in wave 3 which may end at Fibonacci some of the extension levels as shown on the chart, around that 1500 figure. Anyhow if/when pull-back occurs, this will be only temporary and corrective wave 4 before market breaks higher again.

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USDJPY: Corrective Pull-back May Extend To 86.80

USDJPY reversed lower in the past 48 hours from a new high printed above 90 figure. Notice that pair extended slightly through the impulse channel support line (connected from blue wave three and four) and is now testing levels of 87.80 support. Typical the former wave four will be ideal zone for a continuation of a larger trend, which in our case that would be to the upside. However, decline from 90.26 was made only in one leg that can be counted impulsively, which means that pair will most-likely extend even deeper in black wave 4 since we need three waves of decline, because that’s the minimum structure of a corrective price action. The next thing is that broken trend-line will also turn in to a resistance which could happen in minor wave (b) pull-back to 89.30 and cause a new sell-off in wave (c) of 4. With that said, we see room for further USDJPY weakness towards 86.80 while pair is capped below 90.26.

Larger daily picture for USDJPY also suggests that deeper pull-back is underway after completed five waves up in wave 3 with bearish divergence at the top.

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GOLD Intra-day: Sideways But Bullish

Gold is very slow these days and quite tricky on the 4h or even daily chart. In situation like this we need to focus on time frames where structures are cleaner. We are looking at the 30min chart below where we have two contracting trend-lines that form a shape of a triangle. market could make a wave (e) pull-back to 16808 before market turns up, towards 1700.

Any intra-day long positions should have stops beneath 1683 invalidation level.

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EURUSD Gains After BoJ Meeting- Technicals May Send The Pair Even Higher

EURUSD pair reversed lower at the end of the last week after unsuccessful push through 1.3400 resistance. From an Elliott Wave perspective we think that pair just slowed down for few days in a fourth wave consolidation that is still incomplete but more importantly its part of a bullish trend. As such, sooner or later EURUSD will probably recover and break out of 1.3250-1.3400 range. For now we like a triangle idea after recent bounce from lower side of a range followed BOJ meeting which is bullish for the markets so risk on trend may continue which will help to lift the EUR and other currencies, expected USD and JPY.

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Triangle


A Triangle is a common 5 wave pattern labeled A-B-C-D-E that moves counter-trend and is corrective in nature. Triangles move within two channel lines drawn from waves A to C, and from waves B to D. A Triangle is either contracting or expanding depending on whether the channel lines are converging or expanding. Triangles are overlapping five wave affairs that subdivide 3-3-3-3-3.

USD Index Could Break Out Of A Triangle Very Soon-Elliot Wave

At the start of January we discussed about two possibles with members regarding the pattern on Dollar Index in wave (B) position; we mentioned flat or triangle. Well, looks like triangle appears to be the case now after only three wave rise from 79 to 80.90 level followed by another tree wave fall to 79.30 which we think it was a D) wave. As such, pattern could be in final stages now so be aware of a reversal lower from around 80.10-80.60 resistance area. 

On the 4h chart we can see that USD index recovered nicely from wave D) swing low. Notice that pull-back is in three waves that represents wave E), final leg of a triangle pattern. Prices also reached 50% retracement area so do not be surprised if market will turn sharply lower in this week. An impulsive weakness back to 79.57 will open the door for much lower levels. In such case traders may take advantage of stronger EUR. Invalidation level is at 80.90; as long market trades below this figure we will look lower.

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Sell Gold at 1680-1682

Sell Gold (Intraday) at 1680-1682 For 1672-1665. Stop Loss above 1686.

Sell Gold @ 1680-1682

Sell Gold (Intraday) at 1680-1682 For 1672-1665. Stop Loss above 1686.