Sunday, December 25, 2011

Eur/Usd : Still down

Last week was another leg in the wave X. It is possible that this wave X transforms into a triangle, but for now i'm counting price in wave Y. This wave Y is part of a last leg of wave (W), which started at the 1.4939 top.

Sunday, December 18, 2011

Eur/Usd : Decline to bottom

Last week i was looking for a breakout of the channel. This came in a different direction than expected. The highest probability was for a rally, but the market decided to decline instead. After breaking the channel, price retested it, meaning that the market recognizes the channel. The break was bearish and key levels have been broken. Price is now also firmly under the 2nd trendline of the daily chart. As for EW, price is near the end of wave (W) of Y. There's a nice fibonacci target zone around 1.2450 - 1.2500. Look for price to finally find some support around those price levels and start a wave (X) rally, which could take a couple of weeks depending on how sharp this rally will be.

Sunday, December 11, 2011

Eur/Usd : Waiting for channel break

Not much has changed since last weeks update. Wave B has extended into a bigger corrective wave. There is possibility that this wave B will extend a little further down, but the channel should break to the upside soon. It will be interesting to see if this will be in a corrective or impulsive way.

Sunday, December 4, 2011

Eur/Usd : Countertrend rally

The big trendline on the 4 hour chart was broken last week on a second try, the first time the market snapped back under it. I am now looking how high this countertrend rally will go. 1.4246 should hold unless wave X (started at 1.3145) isn't finished yet. Another possibility is that this countertrend rally has allready finished and price is ready to continue the decline. However with the big trendline break, chances are greater that this rally will go higher. This is why i believe the count with the highest probability is the one where this rally will continue higher as indicated on the chart below. 1.3851 is the 61.8% fibonacci retracement level of the decline from 1.4246 and seems like a good place for price to go to now.

Sunday, November 27, 2011

Eur/Usd : Target is 1.18

1.18 is the eventual target but there are different ways price could get there. Looking at the 4 hour chart i see 2 possibilities of where price could go in the near term. First is the count i've been following, this is my main count. In this case the trendline should not break and price should continue lower after a small rally in the beginning of this week.

The alternative count is a completed complex double three. In this case the trendline should break soon. The question will then become how high the rally will go. 1.4246 could still be broken if wave X isn't complete yet. Another possibility is that the decline is wave A and the wave B rally stays below 1.4246.

When looking at the daily chart we can see a trendline break which was nicely retested by price later on. Today we are at another trendline, which is not as strong as the previous one but could offer some indication of where price is going, will price bounce or break? We can see that price has started to break this trendline, but this was at thin market conditions. As you can see, we are in a big wave Y and price should eventually go below the wave W low at 1.18.

One last thing i would like to mention is that price is very sensitive to news at this time. And the news hasn't been very good. There's Italy which is big enough to take down the entire euro should it become the next Greece. France, which looks like it could soon lose it's AAA status. Germany which has had terrible bond sales last week. And even smaller countries like Belgium are in trouble, they had their rating lowered, mostly because of the Dexia problem i believe. So be sure to follow the news carefully, any rally could reverse on the smallest news event as the outlook will go from bad to worse.

Wednesday, November 16, 2011

Eur/Usd : Temporary low

It appears that price has found some support at the point where Y of A has 2 equal legs. A problem however is that wave Y is small in price compared to W of A. This opens the possibility for different counts, like wave Y of A just having finished it's first leg ( w of Y of A ). Watch for 1.3426, if this gets broken to the downside the 100% of wave W at 1.3229 could be tested.

Eur/Jpy : Downtrend continues

Price action is very choppy and hard to count. A lot of corrective waves in corrective waves. Price has followed the projected path presented on the July 24th chart. The trend is down and should continue in this direction for some time. An alternative count has w of (Y) as a completed wave (Y). This would mean that price will go much lower.

Eur/Aud : Big support

After a decline that lasted for an impressive 2 years and a half, price has been in range for almost a year now. I believe this range will last for a little longer and eventually break to the upside. A break below the 1.3000 level will invalidate this count. At that point the triangle will probably be counted as a bearish triangle.

Thursday, November 10, 2011

Eur/Usd : 1.3600

The count i've been following seems to working out. I've changed the labels from the decline from A-B to W-X because price after the X is corrective, meaning this decline is a complex double three. Notice that around 1.3600 price has been supported or resisted. Price seems to be setting up for a nice risk to reward short trade. If price goes above 1.3867 the count will need to be adjusted.

Xau/Usd : Byebye Gold!

Price went a little higher than i expected. Wave y of Y of B needed to test the 76.4% fib of w of Y of B. Look for both the trendlines to break soon. The question now becomes is the decline corrective or impulsive, this will determine the initial target for the decline.

Friday, November 4, 2011

Eur/Usd : Head, Shoulders and Flag

Price is possibily working on a right shoulder. This shoulder looks a lot like a flag pattern. If this breaks to the downside, price could be in for another big decline.

Tuesday, November 1, 2011

Eur/Usd : Trendline retested

Bad news all around, panic seems to be picking the upper hand. The reaction of the retest of the 2010-2011 trendline was voilent. This means that the market recognizes this trendline and with this the change in trend. The question now becomes if the decline of the trendline retest was impulsive or corrective. This will only affect the path but not the direction. If it is corrective there will be a bigger bounce in the form of a wave X, if it's impulsive there will be a very impressive wave 3 of C in the near future.

Saturday, October 29, 2011

Xau/Usd : Corrective wave ending

The exact count isn't very clear, but 1 thing is certain, the rally is corrective. There's a nice resistance zone around 1.770$ where from the low there would be 2 equal legs. This is also the 61.8 fibonacci retracement level.

Eur/Usd : A little higher

Things seem to be clearing up on the shorter timeframes. As i said in the previous post, there was a possibility for another leg higher on the news. I still believe this will be negative eventually. The reason for this is that the rally is corrective. Alternatives are that this 3 wave rally is part of a bigger corrective wave, so a bigger complex double three, a flat and a triangle are still possible.

Wednesday, October 26, 2011

Aud/Usd : Correction over?

In the last audusd post i was looking for a small rally. This rally has grown bigger than i expected, but looks to be finished now. The alternative is that wave X isn't complete yet and another leg higher will follow.

Eur/Usd : Topping

The markets are all awaiting what will be decided by the EU leaders, but it seems the reaction could be negative. Even if there's a initial rally and there's another leg higher, the result will be euro negative.

Wednesday, October 12, 2011

Eur/Usd : Corrective wave

The higher timeframe has 3 valid possibilities as shown in the last post, so now i'm focusing on the smaller timeframe. From the bottom we can see 7 legs. For now this is corrective unless there's another leg higher. The first part of the rally seems corrective to me. Some people may count this entire rally as an impulsive wave, but that requires a wave 2 as an expanded flat, which is rare. I prefer to count the first part as a corrective complex double three also known as a WXY corrective wave. The 2nd part fits better as a zigzag, the correct labeling for a zigzag is ABC. It is possible that this zigzag isn't done yet since wave C is still smaller than wave A, usually in zigzags A and C are equal in size. The question is now where this fits into the bigger timeframe count. For this we can only wait for more price action.

Monday, October 10, 2011

Eur/Usd : 3 possibilities, 3 problems

I can see 3 valid possibilities at the moment:

1: Complex double three

This is the main count i've been following for a while now. Problem : Wave (X) is very small when compared to the size of the internal waves of wave (W).

2: Triangle wave X

This is probably the count Elliott Wave International has, not sure but just a guess from the free information they gave on their website. Problem : wave E of the triangle is very very small. Beside that, it's actually a nice count and wave W and Y are equal.

3: Complex double three with a large wave Y

Like count 1 but with larger wave Y. Problem : Big difference between size of wave W and Y

Friday, October 7, 2011

Eur/Usd : Rally complete?

The rally survived both the ECB event and the NFP event. Now at the end of the trading week the fitch downgrades seem to have triggered a new downtrend. There is a chance of this rally only being the first part of the rally. In this case the rally could resume at lower levels. But keep in mind that on the daily chart the trend seems very bearish.

Wednesday, October 5, 2011

Eur/Usd : Pre ECB rally

The count appears to be on track and with J.C. Trichets last appearance as head of the central bank, it looks like the ECB event tomorrow could have a negative effect on the euro, there are people who think a rate cut is coming. This would certainly trigger a new leg lower. But before that i believe price will rally into the event.

Tuesday, October 4, 2011

Aud/Usd : Small rally

In the last post for aud/usd i mentioned that the countertrend rally could be small and retest the trendline. This has happened and bears are now in control. Any rally should be small.

Monday, October 3, 2011

Xau/Usd : 1726 resistance level

Since the last update price has continued to rally as expected. The rally is corrective and could end around 1726$. At this level we find the 50% fibonacci retracement level from the 1920$ - 1532$ decline and this is where there would be 2 equal legs from the bottom. The alternative is that price is in a triangle wave B.

Eur/Usd : Bearish count

It is looking more and more like the bearish alternative was the correct count. This means that wave (X) was really small and the decline is very powerfull. Look for 1.3115 to offer some support, but support shouldn't hold very long.

Tuesday, September 27, 2011

Eur/Usd : The correction

Following the count where price has bottomed in a wave (W), price is now in wave (X). The first part of wave (X) seems to be finding some resistance as price has reached a small trendline.

Monday, September 26, 2011

Xau/Usd : Flat complete

It appears the decline had another low in it before making a bottom. From the top there is now a 3 wave move down, a 3 wave rally and a 5 wave decline. A 3-3-5 makes a flat. This completed flat is probably just a first part of a decline that will last for many weeks. Notice the big hammer that formed right at the 161.8% fib extension, helping to confirm a possible bottom.

Eur/Usd : A bounce to sell

Focus remains on the 100% fibonacci extension level as price seems to reject this level. Wave Y of (W) subdivides into a complex triple three ( wxyxz ). The alternative remains the same, where the 2nd X wave in the complex triple three is counted as a complete wave (X), the following decline would then be the first part of wave (Y), this is a very bearish count and the probability of this count being the correct count is small because of the very small wave (X).

Sunday, September 25, 2011

Xau/Usd : Pause in the decline

In gold against the us dollar (Xau/Usd) we can see that from the top there are 2 almost equal legs separated by a triangle. Since the 1920$ top is a major top i believe the rally will be corrective and should not reach a new high. The rally to the top was very strong and sharp, the reaction to this once price turns like it has now should be the same but in the opposite direction. It is for this that i believe that the countertrend rally could be small.

Aud/Usd : Countertrend rally

On the last post for this pair i was looking for a retest of the first trendline. This came slightly higher than expected, but once it happened price fell hard. So hard it has broken through the second trendline aswell. This decline looks like it's ready for a small countertrend rally, perhaps retesting the second trendline.

Eur/Usd : Triangle

On the 15min chart we can see that there's a good possibility of a triangle. There are different ways to count this and how this can evolve into another corrective pattern, but i believe a bullish triangle fits best.

Thursday, September 22, 2011

Eur/Usd : Is a rally still possible

There's was no surprise rally, but instead a big decline. 2 things should be kept in mind, the break of the rising trendline is very bearish and the top at 1.4939 was a big top which will probably hold for a very very long time. Now let's have a look at the daily chart. Here we see that from the 1.4939 top price has declined in a corrective way. Today price has touched the level where there are now 2 equal legs from the top. The problem here is that the 2nd leg down is a complex triple three. In this case a rally is still looming which could retest the broken trendline.

If we count the second leg as a more common complex double three, the problem is that the rally following the bottom is very small, this is possible if the market decides to be extremly bearish, a bit like the 2008 decline.

Todays candle might also give some indication, a possible hammer could indicate a bottom. The question will then be how big the rally will be. I'm not looking to buy into a possilbe rally, but should price decide to rally anyway i will be ready to short at higher levels, especially if this rally reaches the trendline.

Eur/Usd : Surprise rally

With this latest decline it looks like bears are in control, but i believe that there is still a possibility for a rally to 1.40. Should price get below 1.3493, only 1.3446 could offer some support as a possible extended flat wave B, but chances would be much greater that this would be a start of a new downtrend, in other words wave (Y).

Wednesday, September 21, 2011

Eur/Usd : Catching the rally

The triangle count didn't work out but the bigger count is still in play. This small wave X has transformed in a bigger complex correction and has nice fibonacci support zones.

Eur/Usd : Shortterm triangle possibility

Following the main count where price is in wave Y of (X) there's a possibility that x of w of Y of (X) is a triangle.

Tuesday, September 20, 2011

Eur/Usd : How low can you go?

Price made another low since yesterdays post but has rallied since. This rally is probably the start of wave Y of (X). The alternative, where wave (X) is allready complete, is still in play aswell.
It will be important to see how price reacts around the falling trendline, will price bounce in a retest or ignore the trendline and continue lower.

Monday, September 19, 2011

Eur/Usd : 1.40 resistance

At the moment there are 2 possibilities, either wave (X) is finished allready and price is getting ready to break the 1.3493 low in wave (Y) or wave (X) is still forming. I have a slight preference for an incomplete wave (X) because more time and price make a better wave (X) compared to the size of wave (W). If this is the case, a test of the 1.40 could be in the making. At 1.40 we have of course the round number resistance, but also the 200 week moving average which is now acting as resistance and the trendline on the daily chart should also push down price should price come near it.

Thursday, September 15, 2011

Eur/Usd : Retesting the trendline

Todays rally is big enough for me to count 1.3493 as the end of wave (W). The rally following this bottom is clearly corrective and the question now is how long this rally will survive. Price is going to retest the important trendline at least once. After retesting once price could resume the downtrend, another retest a little higher and later seems more favourable.

Wednesday, September 14, 2011

Eur/Usd : Bearish flag

The count i've been following is on track. 1 more low would finish a 5th wave in an impulsive wave. This impulsive wave is a wave C of Y. The exact fibonacci numbers were not completly correct in the previous post since i was looking at daily candles. The zones were still pretty much the same however. An alternative is that the decline has allready finished and price is just starting a corrective rally that will retest the broken daily trendline.

Friday, September 9, 2011

Eur/Usd : Big Break

A important trendline got broken to the downside, together with a break of the previous low, this is now a downtrend. 2 possible stopping points for this downtrend are 1.3700, the 76.4% of W of (W) + 100% of A of Y, this implies that the break of the big trendline was in a corrective way. But this is just the alternative, the main count is that the break was impulsive and the target zone for this count is between 1.3346 ( 161.8% of A of Y )and 1.3445 ( 100% of W of (W) ). On a sidenote, my first child was born yesterday, a beautifull girl named Laura. I also proposed to my girlfriend and over the weekend i'm moving into my new house. To put it in EW terms : my life is in wave 3 of 3 up!

Thursday, September 8, 2011

Eur/Usd : Very bearish possibility

The decline from the 1.4280 high seems impulsive. Which means that this high should now be counted as wave B instead of X. This is because wave C is impulsive instead of a corrective wave Y. With the big support noted in yesterdays post, a break of this could come in the form of a wave iii of 3.

Wednesday, September 7, 2011

Eur/Usd : Weekly chart

A quick look at the weekly chart shows that price is at a crucial point. There is support from the rising trendline and the 200 weekly moving average. Even the falling trendline could offer support if you consider this a a retest of that trendline. Big support, but the EW count i've been following calls for a break of this support and when it does break, it could be violent...

Tuesday, September 6, 2011

Eur/Usd : Trendline retest

The decline has ended for now and there was a sharp rally from the lows. It is possible that this rally is allready complete, but i believe price will go a little higher today first and retest the trendline.

Sunday, September 4, 2011

Usd/Cad : Going to 1.30

On the weekly chart we can see that the trendline got broken and now got retested. I'm not certain how to count the rally from the bottom, corrective or impulsive, but the direction is the same : up. There is a possibility that price will test the trendline again at a lower point, but for now i'm bullish.

Saturday, September 3, 2011

Eur/Usd : Sell the rally

The first 2 trendlines mentioned in the previous post have been broken and focus now turns to big trendline which started at the low of june 2010. The decline from the 1.4939 top is a corrective wave Y which will eventually break the 1.1875 low. We are still in the early stages of this decline and now price has started a second leg lower. This second leg seems corrective to me, which tells me this is a complex double three. In complex double threes the ideal target is the 100% fib extension, 76.4% fib ext is also a common target level. So a first target for the decline is at 1.3446 ( or 1.3706 = 76.4% ). On the 15min chart we can see the first part is probably finished and when the markets open again, price should have a small rally for the first couple of hours/days and will form a retest of the minor trendline. This should offer a nice shorting opportunity.

Thursday, September 1, 2011

Eur/Usd : Attack on the trendlines

A first minor trendline has been broken, which is an early signal of a trend reversal. The 2 other trendlines will be more important, especially the lowest one, but a break will come later and risk will be greater.