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Impulsewave

EURUSD in Key Congestion Zone - Watch 1.0800 or 1.0950EURUSD dropped today into a zone that likely creates a strong struggle between bulls and bears. The Elliott Wave picture is such that there is a bullish view and bearish view which both can be satisfied based on the current pricing. Therefore a meaningful push below 1.0800 or above 1.0950 begins to elevate certain patterns and demote other patterns. Bearish Wave 3 The bearish wave iii of (iii) is depicted on the chart above. A break below 1.0800 likely accelerates towards the 1.618 extenstion at 1.0480. This is the preferred count as sentiment shifts to the bullish side...using it as a contrarian signal suggests we look for more losses on the pair. Bullish Equal Wave Pattern Completion The other pattern in sights is that the August 24 high today's low is a large equal wave pattern. This suggest a large bullish burst that potentially retests 1.17. RSI divergence is helping this story develop. As stated above, SSI is shifting towards more buyers and less sellers. These traders have already committed to positions and become a future pool of sellers which would be a head wind to this scenario. Check out our guides for Elliott Wave study or forecasts for EUR, USD, JPY, Gold and Oil HERE . (Free registration required). Good luck and happy trading!
by JWagnerFXTrader
2
Cluster of Wave Relationships at 1.09 - Bears be CarefulThe Elliott Wave picture for the EURUSD indicates there is a higher probability bounce coming. The trend is down, so for those traders who missed out on this move lower will get a shot to short from higher levels. Under the preferred interpretation, it appears we are finalizing the 5th wave lower from the October 15 high. 3 different wave relationships show up near 1.0900-1.0910 with some more down near 1.0860. -circle wave 5 = circle wave 1 = 1.0910 -circle wave 5 = .382 * circle wave 1 through 3 = 1.0907 Additionally, one alternate count I'm watching is that we are finalizing circle wave 3. Circle wave 3 = 2.618 * circle 1 at 1.0903. This alternate would suggest a bounce to 1.10-1.11. From a bearish perspective, we think these red circle waves make up wave 1 at a larger degree. If that is the case, then we should see wave 2 be a partial retracement higher (probably towards 1.11-1.13. We will not look to trade this higher because the trend is firmly planted to the downside, but those who are short may want to manage risk accordingly. Another alternative we're watching is that this 5 wave move lower from October 15 is the matching wave to the late Aug 2015 sell off. If that pattern plays out, there could be a much larger rally that begins from slightly lower levels (between 1.08-1.09). Bottom line, a bounce higher to 1.10-1.13 is likely. From there, we'll see how the pattern is developing to determine pivot levels. Below 1.0800 would increase the chance of a much deeper sell off to below 1.05.
by JWagnerFXTrader
7
GBPJPY Wave (iii) Lower - 186.30 key levelThe pivot lower in the GBPJPY has been on the back burner as the EURUSD collapsed last week. It appears we have a leading diagonal lower in circle '1' that began on the Friday October 23 high. Coincidentally, we are showing Oct 23 as the highest volume day in over 5 years for the GBPJPY. If circle wave '3' finished at today's low, then a small bounce higher is likely to be contained below 185. The higher probability scenario is what I have labeled on the chart. That is to say we are in the beginning stages of wave (iii) lower that may carry us towards 178 and possibly lower to 173. Retail sentiment is positioned at -1.3 so it is not extreme in either direction. If we see volume pick up and/or retail sentiment show up as buyers then that could add more fuel to the bearish fire. Good luck and happy trading!
Short
by JWagnerFXTrader
4
2 Clusters of Wave Relationships - 1.1400 and 1.1455 for ShortsWith the ECB prepared to announce their next round of genious analysis and monetary policy tomorrow morning, let's take a moment and assess the Elliott Wave picture for EURUSD. As we will do from time to time, we'll identify key levels to watch prior to news being released to establish the game plan before emotions run high. From a bigger picture, the sell off from late August to early Sept 2015 is a 5 wave move. Due to its position, that 5 wave move needs at least one other 5 wave decline to match it. So from a bigger picture perspective, the Aug 24, 2015 high will likely hold until we retest levels near the 1.04 handle. Shorter term, there are 2 different clusters of wave relationships showing up near 1.1400 and 1.1455 (see tan boxes above). I am showing either level as the end of a smaller degree red circle wave '2'. Either of these points could be a pivot level to launch the next round of selling. The selling since yesterday's high appears to be a correction and therefore I'm leaning towards higher levels to short rallies from. Your comments are appreciated.
Short
by JWagnerFXTrader
4
USDJPY Bounces From Wave Confluence - 119.40 Key LevelUSDJPY has been stuck in a sideways consolidation. The move off the October 2 NFP low has an impulsive 5 wave look to it. The resulting correction lower from Oct 5 to today landed at a confluence of wave relationships near 119.40. We are seeing this reaction at 119.40 and one potential outcome in Elliott Wave Theory is for a drive higher to 120.50-121.30. Therefore, there is a positive risk to reward ratio trade if we use today's low as the risk. The previous post on the USD/JPY has drifted lower so depending on your entry and stop you either have a small loss or a small profit. Happy trading!
Long
by JWagnerFXTrader
EURUSD Pivots Near 1.1330 Wave Confluence This pop higher on the Fed minutes may be enough to put the finishing touches on a minor corrective wave higher. There is a confluence of wave relationships near 1.1308-1.1340. 61.8% of the Sept 18-22 down trend = 1.1323 (c) = (a) = 1.1317 Blue corrective channel trend line = 1.1340 Wave y = .618 * w = 1.1308 Therefore, we are anticipating another down leg of similar proportion (or greater) than the Sept 18-22 move (350 pips). That would place an initial zone near 1.1000...a nice round number. Sentiment is -1.45 and hasn't moved much over the past few days. It's not a real extreme figure. If prices do bound higher out of this price zone, the next level of resistance is 1.1380-90. Happy Trading!
Short
by JWagnerFXTrader
8
USDJPY Finalizes Triangle - Bearish Against 121.30The Elliott Wave picture on the USDJPY is slowly clearing up. It appears the Elliott Wave triangle terminated on Sept 25. It is common to see the 'e' wave of the triangle break the a-c line (the red line) while holding below the wave 'c' extreme. Subsequent that rejection, we have a 5 wave sell off that cleanly matches up and holds many wave relationships of an impulse. Wave 3 terminated near the 1.618 distance of wave 1 Wave 5 terminated near the equality measure of wave 1 Wave 5 terminated near the .382 length of wave 1-3 Wave 5 terminated near the parallel to the 2-4 price channel The move since the Sept 29 low is clearly corrective. I'm showing a confluence of wave measurements coming into play at 120.40-120.50. (if prices don't make it to the reversal zone, consider a break of the grey trend line connecting both Sept 29 lows) Therefore, we'll look to short into that price zone with 121.30 as the stop loss. First target is near 118.50 so we should be comfortably better than a 1:2 risk to reward ratio. Additional targets exist down near 115.
Short
by JWagnerFXTrader
6
Sterling Turns at the Top End of Pivot Zone - 1.5550 NextLast week, we touched on 1.5650 being the maximum price zone that would keep this bearish wave 3 count alive. Lo and behold, the nerves were tested this morning as price hung out near 1.5650 for a couple hours. There were 3 points intersecting near 1.5650. • Wave c = wave a = 1.5640 • 78.6% retracement of the August to September sell off = 1.5674 • Wave (ii) = wave circle red ‘ii’ = 1.5650 Now that we have sold off a bit from today's high, the wave (iii) picture is still alive. Now, it becomes a test of support and if those support levels begin to break, it will build the case for the wave (iii) picture. The next levels of support to watch is 1.5550 then 1.5450. This wave (iii) has significant implications if it is true. Looking at 1.49 or 1.35 as target zones. Here was a post illustrating our previous view from last week : www.dailyfx.com Good luck!
Short
by JWagnerFXTrader
13
Gold Builds on a Bullish Sequence - 1110 Key LevelWe wrote a couple weeks back on Gold breaking out to the upside. After giving the market a few days to develop its waves, it appears a bullish 5-3 sequence has unfolded to the upside. This presents a higher probability scenario that we may see at least one more 5 wave sequence higher. That means we probably have room to $1190 if not higher based on the longer term count from 2 months ago. Wave Count - Suggests at least 1 more 5 wave sequence higher Wave Measurements - A move above $1200 builds the case we are in wave iii. Traders can add to their position at that point. Sentiment - SSI is showing +1.35 which is fairly tame. We saw in late August the SSI reading turn negative and I would anticipate a similar outcome if this move develops. Bottom line, we're anticipating a wave iii move towards $1245 while $1090 holds. Also, based on our other bearish views on EURUSD and GBPUSD, buying Gold while selling EUR or selling GBP (essentially long Gold/EUR or long Gold/GBP) may be a paired trade to consider as well.
FX:XAUUSDLong
by JWagnerFXTrader
9
Sterling Setting Up a Wave 3 Fall?The previous 2 down waves for Sterling appear to be impulsive. This sets up a bearish scenario that we’ll look to position for. The main EW count shown on the chart above suggests we are grinding higher in a wave (ii). This should be a partial retracement that likely terminates below 1.5650. The sweet spot of a reversal is in the 1.5500 area. If prices are successful in pushing below Sept 4, 2015 low of 1.5160, then the probability elevates that we are in a wave 3 and prices may move towards 1.37. Elliott Wave Count – wave (ii) of circle ‘iii’ of (3) – this is at a very bearish portion of the wave sequence. The alternative view is that the June 18 high to the Sept 4 low is a larger corrective wave. This would retest highs of 1.6000 so the behavior near 1.55-1.56 sets the tone. Wave Measurements - the Aug 25 to Sept 4 downtrend carves as a clean 5 waves (not shown). Look for a 50-61% retracement in wave (ii). SSI – Currently sitting at +2.17 as the majority of traders are currently long. OBV – The Daily chart OBV is hard on its lows as downside volume has been beating the upside volume.
Short
by JWagnerFXTrader
4
2 Views Suggest Counter Trend Bounce HigherAs we approach major news events, one exercise I like to do is assess the possible wave picture before the event so when the volatility of the event hits, I'm mentally prepared with a plan. For anybody that has traded for a while, we've been caught in 'chasing' mode during a volatile news event countless times and it is no fun. What strikes me is that Thursday's sell off stopped at a confluence of wave relationships near 1.1090. Therefore, as the labels on the chart suggest, the potential for a move up to 1.1300 is elevated. Even if Thursday's sell off was a wave 'b' of an expanded flat, that still suggests a bounce higher to at least 1.1250. Retail sentiment has been increasing which suggests the longer term trend is shifting lower so any bounce higher may be one to consider shorting...but not until the 1.13 area. A break below Thursday's low in conjunction with a GBPUSD break down may suggest a powerful 3rd wave lower is already underway. *Feel free to share your views as well. I'm always looking for other options.
by JWagnerFXTrader
12
USDJPY Poised to Sell Off Again?The USDJPY chart is looking quite similar to the SPX500 chart. The wave picture appears incomplete to the downside. The current upward push terminated at a former swing low and is within the bounds of a 38-50% retracement of the preceeding 3rd wave. Therefore, we are anticipating a fifth wave lower to retest Monday's low near 116. Here are the internals we are watching: Elliott Wave Count: It appears we are in a wave (v) lower to retest 116. The counts for EURUSD, SPX500, and Gold all show US Dollar weakening. Wave Relationships: The wave (iv) appears to have terminated in typical relationship to wave (iii). That places a target for wave (v) near the wave (iii) low of 116. OBV: 1 hour and 4 hour OBV is hovering near lows even though price still has a couple hundred pips to match the lows. This means down volume is still in control and is a bearish symptom. SSI: Sentiment is currently positioned at +2.5. Both long and short positions have dropped compared to Friday's levels. Positioning dropped means traders are less committed to the market...possibly out of fear. However, at +2.5 it is still an extreme SSI reading. Since the stock market sold off and ended the day on its heels, this suggests the USDJPY may follow suit. Will China step in and rescue equities?
Short
by JWagnerFXTrader
10
Stocks Push Into Resistance Zone - Look for Opening Gap to FillAs we are about 90 minutes for the US Stock market bell ringing, overnight price movements suggest a gap higher on the opening. Assessing the wave pattern and wave measurements, it appears this opening gap likely will get faded as we retest the lows from yesterday. Prices could drift as high as 1970 and still be within the realm of a normal upward correction as it appears we are in wave iv. If correct, wave v would move lower retesting yesterday's low. This view lines up with the EURUSD as well as it approaches support and may likely retest its highs from yesterday.
FX:SPX500Short
by JWagnerFXTrader
6
EURUSD Repels From Wave Relationship Confluence - 1.1450 KeyToday’s rejection at 1.1720 coincided with multiple wave relationships. It is difficult to determine which count is standing out as the confluence includes relationships from the top 2 counts. We’re leaning towards another 1 or 2 series of down-up sequences which suggests slightly higher prices. Therefore, the better risk to reward ratio trade suggests waiting to buy until EURUSD drops back to 1.1350-1.1450 while targeting 1.18. I’m leaning towards the impulse labeling on the chart because RSI is behaving more like a 3rd wave than a 5th wave. That suggests more jabs higher may still exist. Additionally, on ‘b’ waves (like count #2 suggests), though prices pivoted at the 1.382 times wave 'a', we should see heavy divergence on RSI. As we troll through several time frames, we see no evidence of divergence which leans us towards the impulse. Here are other internals we monitor: Elliott Wave Coun – It appears we are in red (iv) of circle ‘c’ of blue Y. This suggests more upside potential with the greater risk to reward ratio trade from lower levels as we anticipate the end of wave (iv). Wave measurements – typically wave (iv) retraces about 38.2% times wave (iii). This would place a target near 1.1450. This price level also coincides with the June 18 and May 15 highs. SSI – SSI currently sits at -2.6 which is near Friday morning’s level. Oddly enough, as Friday ended, SSI was approaching -3 so traders are less willing to sell this rally which suggests we may sell off some. OBV – Volume surged and is carving new highs. This is bullish.
by JWagnerFXTrader
10