GOLD moved lower as expected, but because of a very sharp and aggressive sell-off we reworked the wave count. We are now tracking a three wave A)-B)-C) Elliott wave pattern from 1795 swing with wave C) underway, which appears incomplete as we need five waves down from 1696. As such, Elliott traders must be aware of more weakness in this week as current recovery could be a black wave 4 that will look for a tip around 1595-1605. Market remains in bearish mode as long as 1651 resistance is not breached. Under this bearish scenario prices could hit 1525/30 level where red wave C) equals to wave A) measured from wave B) high.
USD -Index: Testing 61.8% Fibo Of July 2012-September 2012 Move
Current sharp leg up could easily be wave C) of a flat correction in wave (B) which is unfolding already since September 2012. In fact, price is approaching to some very interesting resistance zone around 81.70-82.00 (61.8% Fibo) where bulls could slow down.
on a weekly chart below we are also observing a huge head and shoulders pattern while 84.00 level is not breached.
Elliott Wave Analysis suggests that current rally on AUDUSD is probably part of incomplete minimum three-wave rally that could reach 1.0360/80 swing zone in the next 2-4 trading days.
On a daily chart there is morning star formation in progress that also supports the idea for near-term bullish waves, but need to see today’s close around current levels or higher.
Elliott Wave Analysis: EURUSD, Bearish But Overlapping
Despite strong bearish momentum decline from 1.3710 still can be corrective move, because each time when there was a bounce the market also made an overlap with former swing low.
EURUSD Broke 2012 Support Line; Can This Be Start of a Major Sell-off?!
Expecting a three wave bounce back to 1.3300 in March, before downtrend extends.
EURUSD daily- line chart
EURUSD monthly
The overlay chart below which shows that most of other correlated markets turned lower, but not S&P which is still bullish but alone. This could be a sign and S&P is approaching to its top. Market Correlations
USDCHF accelerated higher at the end of the last week slightly through the upper channel resistance line which is a bullish signal for the pair. Observing a new wave count with possible impulsive rally underway to 0.9500 area while 0.9335 is not breached.
AUDUSD: Reversal Pattern Is Pointing Towards 1.0375
As per Elliott Wave Analysis, sharp impulsive reversal higher in this week suggests that AUDUSD found a temporary low and completed an ending diagonal in wave 5 with a throw-over formation. Throw-over occurs when volume is high in the fifth wave that approaches its lower trendline of the pattern, and extends slightly beneath it before reversal occurs. As such, the wave count is now pointing higher for a minimum three waves retracement back to former black wave four levels; 1.0375.
Pair also tested and reverse lower from blue wave (iv) resistance yesterday that caused a current a pull-back in wave B that will ideally look for a support around 1.0200 area. Expect a wave C rise from those levels, while pair trades above 1.0115 invalidation level.
USDCAD is trading nicely higher for the past few weeks, which was expected after wave B) pull-back down to 0.9800 support at the end of 2012. As per Elliott Wave Analysis, after completed correction the market will make an impulsive price action, in wave C); five wave rally in wave C), which is still incomplete. For now USDCAD has only three waves up to 1.0340 so more gains to come after current wave 4 pull-back that could test 1.0200 level next week, before uptrend resumes. Critical level is at 1.0100. As per Elliott Wave Rule, wave four must not make an overlap with wave one.
Elliott Wave Analysis indicates that USDJPY is trying to stay with a larger uptrend now after recent reversal down to 95.50 support which appears to be wave iv).
GBPUSD is in sharp uptrend for the past two days, which was expected from a Elliott Wave Analysis after five waves down in red wave 5) of (3) followed by a broken trend-line. Well, current rally has an impulsive structure which means that leg is part of a larger recovery which will probably prove corrective as we are tracking a blue wave (4) pull-back.
AUDUSD Is Sideways But Still Bullish Within Larger Trend
Pair has reached 1.0375/1.0400 zone last week that we have been focusing on for some time with our clients, but based on the latest wave structure we could see even higher levels on this pair
S&P 500 Remains Bullish After A Corrective Retracement To 1537
S&P500 cash market gapped lower in this week, exactly after prices tested 1560-1570 resistance area for wave (iii) as highlighted several times to our members last week
EURUSD Could Find a Low When S&P Completes a Downward Correction
Markets are back in the range and trading sideways now after a reversal lower yesterday on US stocks. The S&P500 cash market moved close to 1538 support which of-course also pulled down the others as well, such as DAX and even NIKKEI futures. Meanwhile, we still have unresolved situation on EURUSD, where both counts from yesterday are still valid. 1.2880 remains key level for a push down to 1.2810. But as already noted few times this week; we think that sooner or later EUR will recover.
EURUSD
The S&P futures moved down to 1534 which now could be trading in wave C of an incomplete corrective retracement from 1558 high. If we get a bounce from 1526 support on S&P then EURUSD should find the bid as well because the correlation is tight on the intra-day basis, as shown on the overlay chart below.
S&P Futures count
S&P vs EURUSD
Generally speaking, we think that risk-on will resume, but probably next week once S&P bottoms, when also some new opportunities for USD shorts could occur.
