Sunday, 18 February 2018

The Pound Debacle

Hi Traders,

The Pound (now at 1.4025) dived as predicted in my previous newsletter. Unless a surprises rally to 1.45 occurs, it is now supposed to bounce back to 1.41 before resuming the major downtrend.


ELLIOTT WAVES


The monthly chart reveals that the Cable is performing a huge a-b-c where  wave-c is made of 5 waves down. Four of these waves are already fully deployed. The making of the fifth wave has just started.

The weekly chart displays the end of major-wave-4 but it also shows that the theoretical target is 1.45. This is one of the two reasons why I said that a last minute "surprise rally" is still possible. The second reason is that the wave count actually allows it.

The daily and the 4-hours charts display four small waves down from the top at 1.4350.

The 4-hours and the 1-hour charts suggest a limited rebound to 1.407-1.410 before resuming the downtrend.





Monthly chart, click to enlarge








Weekly chart, click to enlarge







Daily chart, click to enlarge







4-hours chart, click to enlarge






1-hour chart, click to enlarge








Thursday, 1 February 2018

The massive depreciation of the USD vs YUAN

Hi Traders,

The us dollar vs Chinese Yuan (now at 6.298) is bottoming down, maybe around 6.27 or earlier. A retracement to 6.44 might start soon.


ELLIOTT WAVES


The weekly and the daily charts show the impressive depreciation of the US dollar since January 2017, just about when the new US president took his office. 


Considering 100% the range between the highest high and the lowest low of the USD vs YUAN  (6.9874 - 6.0153), the USD dropped a wopping 72% in 12 months.


Between 1.29 and 1.25 (see the target at 1.27 on the weekly chart), the USD might unfold a retracement wave to 6.44
 as displayed in the daily chart.




Weekly chart, click to enlarge







Daily chart, click to enlarge







4-hours chart, click to enlarge







Wednesday, 31 January 2018

The Pound: a dead duck in the water?

Hi Traders,

Although I originally expected the Pound (now at 1.42) to top around 1.45, it  might not be able to make it. 

Even if the GBPUSD attempts another rally to 1.45, it should be the last one and the start of a major downtrend might be in sight.

Consequently, the top we have seen at 1.4345 might be the very end of the rally started on Oct 2016 at 1.1825.


ELLIOTT WAVES

The monthly and the weekly charts display the end of major wave 4. They also show the theoretical target at 1.45.

The daily and 4-hours charts display the last wave count.



Monthly chart, click to enlarge







Weekly chart, click to enlarge







Daily chart, click to enlarge







$-hours chart, click to enlarge







Wednesday, 17 January 2018

The Euro taking a break

Hi Traders,

The EURUSD (now at 1.226) might be staging a temporary top followed by a  retracement to the 1.19 area where it should resume the rally to 1.26 or higher. 



ELLIOTT WAVES

The monthly chart reveals that the Euro is unfolding "major wave 4" to 1.26 and maybe even to 1.30. Note the theoretical final target at 1.3016

The weekly chart shows that "major wave 4" is supposed to be made of three waves up (in black).

The daily chart reveals that the target of the ongoing retracement down is the area 1.202-1.186. As you can see, the Euro is performing a retracement by means of minor wave 4.

This is also clear in the 4-hours chart and in the 1-hour chart which both show five waves up and the beginning of the retracement.



Monthly chart: click the chart to enlarge










Weekly chart: click the chart to enlarge










Daily chart: click the chart to enlarge










4-hours chart: click the chart to enlarge










1-hour chart: click the chart to enlarge










Monday, 15 January 2018

The Aussie Dilemma

Hi Traders,

The Aussie (now at 0.7956) might top in the area 0.7940-0.7996. This top should trigger a retracement to 0.78-0.77.  BTW, what is expected afterward might be debatable. Let's see why.

ELLIOTT WAVES

On the right-hand side of the monthly and weekly charts there is an a-b-c-d followed by 4 waves in green. Apparently, the AUDUSD is trying to unfold wave 5 (in green) which would complete the a-b-c-d-e as well as wave 4 (in red).

This means that, after the retracement above mentioned, the Aussie could actually resume the uptrend to 0.85-0.86 or even to the 0.92-0.95 area.

The daily chart displays the four legs (in blue) and the target at 0.7940-0.7996. It also shows that wave 4 is made of 7 smaller waves, which is equivalent to a 3 waves system. This confirms that this is a typical wave 4.

Consequently, after the top at 0.7940-0.7996 and the subsequent retracement to 0.78-0.77, there could be a rally to 0.85-0.86 or even to the 0.92-0.95 area.


Monthly chart, click to enlarge






Weekly chart, click to enlarge




Daily chart, click to enlarge






4-hours chart, click to enlarge






Friday, 1 December 2017

GOLD PERSISTENT WEAKNESS

Hi Traders,

I think that everybody got the message. A at this point, the combination of crypto-currencies and low inflation is probably the worst enemies for GOLD (now at 1275).


Hence, it's probably a good time for some trades to the South side as Gold might target the 1200 level in the short term (see the monthly chart).

Furthermore, the XAUUSD might not be able to find a serious support before hitting the area 1155-1130 (see the weekly chart).

ELLIOTT WAVES


I must admit that the identification of the Elliott Waves posed some challenges. 
Initially, the monthly chart displayed essentially the following waves:

  • five impulse waves up from Sept 3,1999 (at $253) to Sept 5, 2011 (at 1920) Timing: 144 weeks. 
  • three retracement waves down  (a-b-c) from Sept 6, 2011 (at $1920) to Dec 15, 2016 (at $1046). Timing: 64 weeks, so far.
That looked very much as a case study and I honestly thought that, at 1046,  the downtrend was over.

Instead, I overlooked  an important detail: the candlestick pattern at 1046 (see the low at 55C) was a clear warning that the incoming uptrend was going to be only temporary.

Conclusion: even if a rebound to 1281-90 is still possible, Gold should resume the downtrend to the 1200 area.




Monthly chart, click to enlarge






Weekly chart, click to enlarge






Daily chart, click to enlarge






4-hours chart, click to enlarge




Wednesday, 29 November 2017

The Euro next move

Hi Traders,

After a small rebound to 1.18-1.19, the EURUSD (now at 1.1852) should resume the downtrend. First intermediate target: the area 1.174-1.172

ELLIOTT WAVES

The monthly chart and the weekly chart reveal that the Euro might have  entered a pattern that could last years in the making. If this is the case, the present wave configuration is the typical wave 4 of a downtrend which is made of:
  • three-five waves up to 1.21 (wave a),
  • three waves down to 1.08 (wave b), 
  • followed by five waves up to 1.30 or so (wave c). 
At present, the Euro seems to be running wave b down to 1.08.

The daily chart and the 4-hours chart show a small downtrend made of five waves, four of which are fully deployed already. The fifth wave down just started unfolding.

NOTE the target at 1.174-1.172 in the 4-hours chart and the target at 1.136-1.124 in the daily chart.



Monthly chart. Click to enlarge






Weekly chart. Click to enlarge






Daily chart. Click to enlarge






4-hours chart. Click to enlarge






WTI OIL CLOSE TO A TOP?

Hi Traders,

The WTI OIL (now at 56.70) might stage a temporary retracement to the 56.3 area before the final rally to 61.3-61.8. However, the theoretical target at 66-69.15 cannot be discarded at this stage.

ELLIOTT WAVES

The monthly chart reveals that retracement wave 4 (in magenta) has already retraced 38.2% of wave 3. Within one-two months, it could top around the 61.3-61.8 area, although we shouldn't discard the higher cluster of blue lines at 66-69.15 (50% retracement).

The weekly chart doesn't add much information to the picture but the daily chart and the 4-hours chart draw out attention to the fact that, after point b, the OIL has fully deployed four waves up, plus a number of "extensions" of the "still unfolding" wave 5.

At present, this "extension pattern" suggests that OIL might bottom around 56.3 and launch the very last assault to the target at 61.3-61.8. However, if further extensions occur, OIL might reach the theoretical target at 66-69.15 in a much longer time.

Finally, the 1-hour chart displays the incoming target of this retracement wave at 56.31 (blue horizontal line)

NOTE the vertical lines on the weekly chart. WTI OIL took 99 weeks to develop wave 2 (in magenta). In case wave 4 takes the same amount of time, it would top around Dec 22. 




Monthly chart. Click to enlarge








Weekly chart. Click to enlarge








Daily chart. Click to enlarge








4-hours chart. Click to enlarge








1-hour chart. Click to enlarge







Thursday, 16 November 2017

The Aussie close to a trough

Hi Traders,

The USDAUD (now at 0.7594) is getting close to the target area 0.7533-0.7439 where it could set off a new low before bouncing back to 0.773-0.783.

ELLIOTT WAVES

The best way to get the big picture is to look at the historical chart. The long term wave pattern from 1983, as well as the shape of the past waves, are now indicating the direction and the shape of the long term trend.

If the AUDUSD sticks to the expected Elliott Waves, it could reach a minimum close to 0.61 within 5 years. Within 10 years, it might bottom around 0.48 or lower.

Let me recall a few historical facts. In 1967 the AUD was pegged to the USD at the rate of 1.12 USD and, on Sep 9, 1973 it was adjusted to a fixed rate of 1.4885 USD

On Dec 12, 1983 the AUD was finally floated and it started a downtrend immediately. On Apr 2001 it reached the lowest low at 0.4775 USD.

The historical chart below reveals that, from that low in 2001, the Aussie performed an a-b-c retracement up to 1.1080 (July 2011) followed by a downtrend that it's still in the making.

This large a-b-c was just the retracement-wave-4 of a massive five-waves-downtrend started in 1983. That downtrend is not even half away.

Besides, the monthly and weekly charts cast doubts about the last top at 0.81. In fact, after the incoming new low, the Aussie could still stage a surprise jump to 0.85 before resuming the main downtrend.

The weekly chart also reveals the incoming targets and so the daily chart.




Historical chart. Click to enlarge







Monthly chart. Click to enlarge








Weekly chart. Click to enlarge








Daily chart. Click to enlarge








4-hours chart. Click to enlarge














Saturday, 21 October 2017

The YEN: what's next

Hi Traders,

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ANALYSIS


The present rally of the USDJPY (now at 113.50) started on Sept 8th, 2017 and  should temporarily top around 115.6-116.0. The subsequent retracement could bring it back to 112-111 before resuming the uptrend.


ELLIOTT WAVES

The red trend line on the historical chart and the magenta trend line on the monthly chart represent the 69 y/o historical trend line drawn from level 320¥ through the tops at 280¥, 265¥ and 126-125¥.

That trend line is about to be crossed (breakout) around the 116-119 level by the present uptrend.

The monthly chart shows a huge retracement  a-b-c on the making where wave-a and wave-b are fully deployed already. Conversely, Wave-c is actually unfolding right now and should top around 150-165. Others think it will top at 230.

The weekly chart reveals that the present uptrend - started in June 2016 - has already completed 4 waves up.  Wave-5 should reach level 127 as a minimum.

The daily chart shows wave-4 and the unfolding of wave-5. The 4-hours chart reveals that we are approaching the top of wave-3 (in blue, font 12) around 115.6-116.0.




Historical chart, click to enlarge






Monthly chart, click to enlarge





Weekly chart, click to enlarge






Daily chart, click to enlarge






4-hours chart, click to enlarge