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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