Saturday 19 January 2013

EURUSD, Sunday, January 20, 2012

Hi Traders and Happy 2013,

Before getting into our usual analysis let's see what's on for 2013. I've signed up as agreement with a British Stockbroker (to be revealed soon) to get good trading conditions as well as some other benefits  for our members.

They're also in charge of scheduling/organising our Elliott Waves & Candlesticks Courses, Webinars and Meetups all around Australia. This means that I will  have much more time to run courses, webinars and newsletters. More details very soon. 

Finally, we have a new Trading Meetup:

Please also check our existing Trading Meetups, Facebook and Websites:

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Check the monthly chart below: since the top in July 2007 the EURUSD entered a huge trading range between 1.60 and 1.19 labelled 1-2-3-4.

From the last top at 4, EURUSD performed 5 waves down to 1.2043, followed by the last rally to 1.34. 

The rally in parole looks very much like a two-step-pattern which, at completion, would bring soon a new downtrend.

Basically, if this analysis is correct,  the pair is performing a well known 5-3-5 starting from the last top at 4, with 5 waves down and 3 waves up (the two-step-pattern) likely to be followed by another set of 5 waves down.

click the chart to enlarge and esc to exit

See the two-step-pattern (1-2-3) in the weekly chart below.

NOTE: if there's no further breakout above level 1.34, the downtrend will start earlier (if not immediately) as it happens with double top formations (in the 4-hour chart well below).

Instead, if it goes through level 1.34, it should make a new top within the range 1.3450-1.3558), as per Fibonacci calculations.

Consequently, now - or after this new top - the downtrend should resume. Possible targets: 1.1916, 1.1532 and 1.1244, the latter being my favourite.

click the chart to enlarge and esc to exit

In the daily chart below there's the evidence that the uptrend is finished (double top) or almost finished. Just click and enlarge the chart and check the very last numbers in green (1-2-3-4-5)

Wave 5 - in green - is a bit suspicious. Although it's good enough and it  shows a good reversal candlestick (engulfing pattern) it looks a bit too short, meaning that it might attempt to break up again a bit higher.

click the chart to enlarge and esc to exit

See the double top in the 4-hour chart below but be careful: there could be some minor waves up in case it gets through level 1.34 to form a new top within the range 1.3450-1.3558).

click the chart to enlarge and esc to exit

In the 1-hour chart below see the (theoretical) completion of 5 waves up with the formation of a double top

click the chart to enlarge and esc to exit


If there's going to be a major downturn we certainly want to be part of it but it's hard to identify an entry point at this stage till we figure out weather this is a genuine double top.


The attention must now shift to another set of charts: 4-hour, 1 hour, 15-min and 5-min. Reversal Candlesticks showed up in every chart from daily downwards and this is good enough to me to SHORT at 1.3350 although I never enter the market before 5.30pm (Australian Eastern Time).

If the chart goes well above that level, there's the chance that the double top is not genuine


Some might argue that there are not sound economic/financial reasons for such a move down at these stage. Is the USD going to strength or is the EUR weakening? The truth is that we don't really need a reason. We're Elliott Guys.