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.