Tuesday, 3 June 2014

GBPUSD end of the line

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ANALYSIS

Unless the pound (now at 1.6743) makes another attempt to reach my original target at 1.7036 (see monthly chart) this is the end of the line and we are heading to 1.60.

TARGETS

likely: 1.6378 - 1.63048
possibly: 1.6029 - 1.5982
maybe: 1.5765 - 1.5709

ELLIOTT WAVES

The daily chart shows a complete set of 5 waves. Hence, unless there's going to be a double extension (it's always possible with the Pound) the way is down.






Monthly chart, click to enlarge







Weekly chart, click to enlarge





 Daily chart, click to enlarge






Wave Oscillator on a daily chart, click to enlarge






4-hour chart, click to enlarge







1-hour chart, click to enlarge

Monday, 26 May 2014

GOLD and the CBGA 4


The New Central Bank Gold Agreement - CBGA 4


On May 19, 2014 the European Central Bank announced a new Central Bank Gold Agreement - CBGA - amongst 20 European countries.

Why is this catching the attention of the investors in Australia?

PREVIOUS CBGAs


The first CBGA was signed in 1999, limiting the amount of Gold that signatories can collectively sell in any one year to 400-500 tons. There have since been two further agreements, in 2004 and 2009.


THE NEW CBGA 4 

The new agreements are important to the Gold Market for 3 reasons:


1) First, they mark an ongoing commitment by some of the world largest holders of gold to coordination and transparency in the gold market. 

Back in the late 1990s, uncoordinated gold sales by European Central Banks had a significant destabilizing impact on the Gold market.

2) Secondly, they clearly restate the importance of Gold as a reserve asset in Europe.

3) Thirdly, they provide solace to gold producing countriesincluding Australia - that uncoordinated gold sales by some of the world largest holders would not undermine their economic development.








DIFFERENCES

An important difference between these agreements and the previous ones is that CBGA 4 contains no quantitative ceiling. 

CBGA 1, 2 & 3 each contains an annual cap on the amount of gold that can be sold collectively of between 400-500 tons per year.

The lack of a quantitative ceiling this time around reflects the fact that there is no longer any appetite for gold sales.

Having sold this substantial amount of gold under CBGA 1 & 2 and a smaller amount under CBGA 3 European central banks are clearly now comfortable with the level of gold in their reserves.

For the foreseeable future the message is very clear: European gold sales are over.


CBGA REPERCUSSIONS ON THE MARKET



In 1999, as the first agreement was supposed to be enforced on Sept 26,  Gold roared to USD 320 from 252.7 (+26.67%), displaying two huge gaps in early September.

After six months of very high volatility the yellow metal was subsequently hammered back to the lowest low, forming a triple bottom. 


Hence, what it's supposed to happen on September 27, 2014 when the fourth GBCA is going to be enforced? Let's see the weekly & daily charts.




weekly chart - click to enlarge



Conventional Technical Analysis would trust the double bottom in the weekly chart above but it doesn't give you a reasonable timeframe for this to occur.

The Elliott Waves are a bit more helpful by revealing that the wave count  requires one more leg down (wave 5) in the weekly chart  before starting a new uptrend. This should take few months and September is far away.

If the latter is true, Gold should move a bit further down to the area 1174-54 (or lower) in 5 smaller waves to establish a primary low. Afterwards, it might resume the trend up.

Equal probability for the targets further down to 1089 and to the area 1043-1032.

TARGETS:

likely: 1174-1154 (to form a triple bottom)
possibly: 1089 (to reach the theoretical fibo target)
maybe: 1043-1032 (to sit on the primary support)

NOTE:

- The 7-8 doji candles which made the apex of the symmetric triangle in the daily chart below denotes a very low trading volume due to public holidays in the US market (Memorial Day)

- Besides, Gold is quoting now at 1293, which is the perfect centre balance of the triangle. See the 4-hour chart below. 




Daily chart - click to enlarge







4-hour chart - click to enlarge






Thursday, 15 May 2014

GBPUSD reversing

Hi Traders,

The GBPUSD reached 1.6997 and posted a hammer candlestick, reversing its course. This fuelled a strong suspicion of an intervention by the BOE to keep the pound below 1.70 USD and to protect it from the falling EURO. 

The new trend might take the currency to the area 1.6378-1.6304 and to 1.60.



TARGETS:

likely: 1.6378-1.6304
possibly: 1.60291.5982
maybe: 1.5765-1.5709


ELLIOTT WAVES

Quite simple: all charts show the completion of 5 waves up.



CANDLESTICKS

Note the reversal "hammer" in the weekly chart


THE WAVE OSCILLATOR


The wave Oscillator displays the typical Reversal Cusps. BTW, unless the GBPUSD plunges vertically, the W.O. should deliver an entry point only after a rebound.




Monthly chart, click to enlarge






Weekly chart, click to enlarge





 Daily chart, click to enlarge





Wave Oscillator on a daily chart, click to enlarge





4-hour chart, click to enlarge





1-hour chart, click to enlarge

Thursday, 8 May 2014

NZDUSD plunging

Hi Traders,

The  New Zealand dollar (now at 0.8656) plunged as the head of the country's Reserve Bank warned that the central bank might have to intervene in foreign exchange markets to weaken the currency.

This is confirmed by the Reversal candlestick in the daily chart and the Elliott Wave count in the Monthly, Weekly, daily and 4-hour charts


TARGETS:

likely: 0.8510-0.8477
possibly: 0.8081-0.8051
maybe: 0.7812



ELLIOTT WAVES

Quite simple: all charts show the completion of 5 waves up



CANDLESTICKS

Note the reversal "engulfing pattern" in the daily chart


THE WAVE OSCILLATOR

The wave Oscillator displays the typical Reversal Cusps. BTW, unless the NZDUSD plunges vertically, the W.O. should deliver an entry point only after a rebound.




Monthly chart, click to enlarge







Weekly chart, click to enlarge





 Daily chart, click to enlarge





Wave Oscillator on a daily chart, click to enlarge





4-hour chart, click to enlarge








1-hour chart, click to enlarge

Sunday, 4 May 2014

USDJPY defeating US reports

Hi Traders,

The USDJPY (now at 102.18) is heading towards the supports at 100.73-100.64 and 98.35-98.31 (see weekly chart) despite the best US unemployment report of the last 5 1/2 years.

TARGETS

likely: 100.73-100.64
possibly: 98.35-98.31
maybe: 96.86-96.77

ELLIOTT WAVES

The weekly chart shows that wave 4 (in black, font 9) is not complete. After waves 1&2 (in green) we now started wave 3 to the theoretical target at  98.35-98.31, ie. the target within wave 4 of a smaller degree. Then the uptrend might resume.




monthly chart - click to enlarge







weekly chart - click to enlarge







daily chart - click to enlarge






wave oscillator over the daily chart - click to enlarge







4-hour chart - click to enlarge








1-hour chart - click to enlarge 



Monday, 14 April 2014

EURUSD perfect entry

Hi Traders,

After hitting 1.39052 with a triple top (see 1-hour chart) the EURUSD (now at 1.3843) got hammered by a gap at the opening on Monday 14. This occurrence might trigger a downtrend to 1.35 and 1.30.


TARGETS:

likely: 1.3719 - 1.3713 and 1.3671 - 1.3662
possibly: 1.3671 - 1.3662 and 1.3640 - 1.3635
maybe: 1.3470 - 1.3451


NOTE:

EURUSD and S&P 500 seem to be correlated lately. They both developed an orthodox top and started a "flat" with an irregular top higher than the orthodox top (wave 2 in green in the weekly chart).

TIMING:

The irregular top at 1.3955 was in perfect synch with the cycle of 20-21 weeks (wave 2 in green in the weekly chart).


ELLIOTT WAVES

The weekly chart shows the orthodox top at 1.3298. The Irregular top brought in the picture the perfect confirmation of "the end of the line": a "throw over" of the upper line of the giant triangle accompanied by an absolute top at 1.3455 (see the weekly chart).

Both the throw over and the irregular top in the "flat" often occur after an extended wave. In this case the extension occurred within wave 3 of a "two-step pattern" (1-2-3).

The daily chart displays 7 waves up (in green, font 8) confirming that wave 2 (in red, font 9) is a retracement wave up, not an impulse wave.

The weekly chart shows the the last wave up (from 1 to 2 in magenta) is supposed to be a two-step pattern, i.e. a 1-2-3 only.



CANDLESTICKS

Note the reversal "Hammer" in the monthly chart


THE WAVE OSCILLATOR

Unless the EURUSD plunges vertically, the W.O. will deliver an entry point only after a rebound.


FUNDAMENTALS

The expectation and the subsequent implementation of an impending "European quantitative easing" could be the fundamental reason for this  downtrend.

It's about the time. ECB chairman Mario Draghi is 2.5 years late!




Monthly chart, click to enlarge







Weekly chart, click to enlarge





 Daily chart, click to enlarge





Wave oscillator applied to the daily chart, click to enlarge





4-hour chart, click to enlarge








1-hour chart, click to enlarge


Wednesday, 9 April 2014

AUDUSD reversing?

Hi Traders,

Although I was expecting the AUDUSD to get to 0.9388 it  might have reached the top at 0.93656 and start reversing. It's now at 0.9350.

This new downtrend might take the Aussie down to 0.8578-0.8509 or even 0.8160-0.8067 in 5 waves.

NOTE:

There's still a chance of a last minute jump to 0.9388 before reversing.


ELLIOTT WAVES

As in the monthly chart, the AUDUSD as completed 4 waves out of 5 and started wave 5 downwards. Typically, this wave will be performed in 5 waves of a smaller degree.

At present we're staging the beginning of wave 5 downwards- see 1-hour chart


WAVE OSCILLATOR

Enter your trade only when you have a valid cross of the 2 inner lines in See the W.O. build on the daily chart. Remember to place your "trailing stop" according to the "instructions" from the wave oscillator.





monthly chart - click to enlarge







weekly chart - click to enlarge







daily chart - click to enlarge







wave oscillator over the daily chart - click to enlarge







4-hour chart - click to enlarge







1-hour chart - click to enlarge 



Sunday, 6 April 2014

EURUSD almost down to target, then rebound

Hi Traders,

The EURUSD (now at 1.3700) should bottom at 1.3662-1.3634 and rebound to 1.3740-1.3748 in the short term. Afterwards, the downtrend to 1.30 should resume.


TARGETS:

first down: 1.3662-1.3634
then up to: 1.3740-1.3748

then down again:

likely: 1.3489 - 1.3453
possibly: 1.3266 - 1.3182
maybe: 1.2993 - 1.2967


NOTE:

EURUSD and S&P 500 seem to be correlated lately. They both developed an orthodox top and started a "flat" with an irregular top higher than the orthodox top (wave 2 in green in the weekly chart).

TIMING:

The irregular top at 1.3955 was in perfect synch with the cycle of 20-21 weeks (wave 2 in green in the weekly chart).


ELLIOTT WAVES

The weekly chart shows the orthodox top at 1.3298. The Irregular top brought in the picture the perfect confirmation of "the end of the line": a "throw over" of the upper line of the giant triangle accompanied by an absolute top at 1.3455 (see the weekly chart).

Both the throw over and the irregular top in the "flat" often occur after an extended wave. In this case the extension occurred within wave 3 of a "two-step pattern" (1-2-3).


CANDLESTICKS

Note the reversal "Hammer" in the monthly chart


THE WAVE OSCILLATOR

As expected, the WO didn't deliver any entry point for this short as it wasn't safe enough. It will happen when the next downtrend resumes.


FUNDAMENTALS

The expectation and the subsequent implementation of an impending "European quantitative easing" could be the fundamental reason for this  downtrend.




Monthly chart, click to enlarge







Weekly chart, click to enlarge





 Daily chart, click to enlarge





Wave oscillator applied to the daily chart, click to enlarge





4-hour chart, click to enlarge





Tuesday, 1 April 2014

AUDUSD, resuming downtrend

Hi Traders,

The AUDUSD (now at 0.9239) performed a double top (see 1-hour chart below) and resumed the downtrend to 0.8419-0.8303 and lower (see monthly chart).


TARGETS

likely: 0.8672
possibly: 0.8578-0.8509
maybe: 0.8419-0.8303

ELLIOTT WAVES

After point "d", the AUDUSD is staging a very long "wave e" (weekly chart) that could potentially take the Aussie to 0.81 in 5 waves. Four of these waves now seem to be completed (weekly chart).

At present we're staging the beginning of wave 5 - see 1-hour chart


WAVE OSCILLATOR

Enter your trade only when you have a valid cross of the 2 inner lines in the daily.

Remember to place your "trailing stop" according to the "instructions" from the wave oscillator.





monthly chart - click to enlarge







weekly chart - click to enlarge







daily chart - click to enlarge







wave oscillator over the daily chart - click to enlarge







4-hour chart - click to enlarge







1-hour chart - click to enlarge