Elliott Wave EUR/USD

[JahDave]

This should get the USD moving up..........

TOKYO (Dow Jones)--The Japanese government said Friday it will intervene in the foreign exchange market if needed to curb a rise in the yen that it warns could disrupt the economy and financial conditions.
"A rapid or prolonged strengthening in the yen is a problem that cannot be overlooked, given its negative impact on the stability of the economy and financial conditions," the government said in a statement accompanying an announcement of a Y915 billion stimulus package to support the economy.
"The government will take decisive steps, including interventions, when necessary," the government said.
The government also kept the heat on the Bank of Japan to do more to stop consumer price deflation, which has ravaged Japan's economy on and off for years, hindering any sustainable recovery.
The government said it will keep in close contact with the central bank with the aim of conquering deflation, adding that it expects "appropriate and flexible" monetary policy management to support Japan's economy.


-By Juro Osawa, Dow Jones Newswires; +81-3-6269-2794; [email protected]

I wasn't sure if the announcement the other day would get the yen moving in the right direction or not, but Japanese government didn't wait to find out. Now that the US session is on, I'm expecting a pullback today before the Dollar starts heading up again. I suspect that if the pullback today is really large the Japanese may buy dollars again tonight.

 

[JahDave]

EUR_USD update. The Euro is following my daily projections pretty nicely but I did call the hourlies wrong several times last week. Hopefully I can tune into the hourly calls better from here on out. Also I'm putting up a 1 hour Ichimoku chart. You can see that the candles are heading towards the cloud right now, so if they make it through watch for more down.

 

[JahDave]

Here is a nice high probability short for the Kiwi. It appears to be making a flat in Elliott Wave terms and yesterdays candle is a very large doji signaling a probable reversal. Daily candles carry a lot more weight than hourly candle Stick patterns, so I'm selling it.

 

[JahDave]

Here is a nice high probability short for the Kiwi. It appears to be making a flat in Elliott Wave terms and yesterdays candle is a very large doji signaling a probable reversal. Daily candles carry a lot more weight than hourly candle Stick patterns, so I'm selling it.

I'm waiting to see if it will go back up to .7370 before I sell it, and if not I will sell it at the .7250.

 

[JahDave]

Here is a nice high probability short for the Kiwi. It appears to be making a flat in Elliott Wave terms and yesterdays candle is a very large doji signaling a probable reversal. Daily candles carry a lot more weight than hourly candle Stick patterns, so I'm selling it.

I was waiting to see what today's candle looked like before naming a candlestick pattern, but now these last three candles can be considered an evening star doji. This is a pretty major reversal indicator and I am quite sure that all Japanese traders will take heed of this.

BTW, I just got in short at .7280 because this is such a strong signal. I didn't wait for .7250.

 

[JahDave]

I wasn't sure if the announcement the other day would get the yen moving in the right direction or not, but Japanese government didn't wait to find out. Now that the US session is on, I'm expecting a pullback today before the Dollar starts heading up again. I suspect that if the pullback today is really large the Japanese may buy dollars again tonight.

I've been long on this pair for several weeks, but I am out now on the sidelines.
I was surprised that the Yen did not make a pullback today so I gave the situation a bit of thought. I think people are afraid to short because the Japanese government did come out today and say that they would intervene again if necessary, but on the other hand if this pair hangs around where it is people are scared to buy it because they don't know if it will keep going up. I am counting today's move up as a nearly completed wave 1 and I think that this pair will probably go into an extended shallow wave 2 unless the Japanese sell off more Yen.

 

[JahDave]

The longer range Euro is still on track and it looks like the B wave will probably continue down now.

 

[JahDave]

The Aussie looks similar to the Kiwi which is the norm. It also looks like the B wave of the flat is over and should be heading down for a while

 

[JahDave]

The Kiwi Evening star doji seems to be proceeding like it normally does and in Elliott Wave terms I am considering the pullback last night as a completed B wave since it hit the 61.8% fibo retracement on the short term chart.

 

[brettus]

NZDUSD trade looks good. I dont know if you follow the dow much but it has reached the 10700 level from early august time. And subsequently sold off.

 

[JahDave]

NZDUSD trade looks good. I dont know if you follow the dow much but it has reached the 10700 level from early august time. And subsequently sold off.

If the Kiwi opens with a gap down then I am going to take profit and sit out and watch for a pullback before reentering short.

 

[JahDave]

The Kiwi Evening star doji seems to be proceeding like it normally does and in Elliott Wave terms I am considering the pullback last night as a completed B wave since it hit the 61.8% fibo retracement on the short term chart.

I'm not sure that the B wave is over. There is a chance it could go back to the 76% fibo level before another nice move down.

 

[JahDave]

I found some forex charts at the Saint Louis Federal Reserve that go back to 1971. I was very excited to get these because this gives a very long look at the markets and where they are heading. I am working on labeling these with Elliott Wave counts and will be posting them up. The first one I am putting up is the USD_JPY. It has taken almost thirteen years for the ending diagonal pattern it completed last week to finish. The Japanese Government actually ended it early by intervening, but it was almost over anyway.

 

[JahDave]

Here is the NZD chart from 1971 to present. My analysis of this pair is that the 4th wave was an expanded flat and wave 5 is underway. Wave 4 cannot intrude on wave 1 territory so this makes a good case that wave 4 is over.

 

[JahDave]

I'm not sure that the B wave is over. There is a chance it could go back to the 76% fibo level before another nice move down.

Here is one more possibility for the NZD. It could make a regular flat before going down to new lows.

 

[JahDave]

Here is a look at the August 24th Euro daily chart and The September 17th daily Euro chart. The current retracement was a little deeper than I originally drew out on my chart, but I won't change my forecast unless it goes past the previous high.

 

[JahDave]

What can Elliott Wave do to improve your trading? Despite popular belief, Elliott Wave is not a trading methodology and does not give entry and exit signals. I thought it could do that when I first started studying it, but I learned otherwise. What it is very good at, is letting you know when a market cycle is nearing an end. If you know what an impulse wave looks like and can chart that, then you know some type of correction is coming up next. Once you are proficient at using EW analysis then you will know when a correction is coming to an end and can start looking for good entry points for the upcoming impulse wave.

I will state this again for anyone that does not already know this...........THERE IS NO HOLY GRAIL OF TRADING.........There are lots of good trading methods and you must use one or a combination of several to build your own trading system. Personally I use Elliott Wave as a guide to know the markets general direction, and I use Fibonacci levels and candlestick patterns to look for entry and exit levels.

Also there is no substitute for learning how to trade yourself unless you give your money to a managed fund. Please don't waste your money on these systems that claim to make you 1000% per month. If those people could make that kind of return they would not be selling their system for any price, much less several hundred or thousand dollars. Spend your money on books and study them diligently. Once you have acquired the knowledge and experience to be successful then that belongs to you and no-one can ever take that away. I personally spend more time studying and learning than I do trading because I have only been trading about three years. I am writing these things down as a humble friend to anyone that wants to be a successful trader. I wish you all great success in life as well as trading.

Dave

 

[JahDave]

Back to work now on the Aussie.

I am going to go into a little more detail about where I went wrong on my recent analysis of this pair. The slanted red channel I drew on the chart was where I thought this pair was headed. Why not because it reached a very substantial fibo retracement of 76.4% and then started down. Also I had a valid wave count that showed the move could be over. Also after the turn at 9200 there were some nice bearish engulfing candles that showed strong downward momentum. All of these thing added up to extremely high odds that a reversal was on. I was happy and making lots of money. I actually took some really nice profit on this trade but alas, I gave it all back later because I did not think I was wrong.........LOL....... This pair went up and I shorted it. It actually went my way again for about 50 pips and I did not move my stop to break even or better because I was sure I was right. It went against me and I doubled up because I was sure I was still right. finally after it passed about 9275 then I had to admit to myself that I was wrong and take a large loss. This is a lesson in how not to trade. I rarely do reckless things like this anymore but I did it this time. The interesting part about this trade is that I could still been out with a profit or break even when I was up 50 pips, plus kept my previous big profit. That is how I almost always trade, but not this time, and it cost me. Just remember that discipline is key. It doesn't matter how good your trading system is.......If you don't have the discipline to follow it then it is worthless to you.

Now let me just comment on what I think is happening to this pair currently. I think it is making a regular flat now. If you notice the green B wave is above the start of the A wave. In a regular flat the B wave is anywhere between 100% and 138% the size of the A wave. I have concluded that in mainstream chart pattern terminology a B wave in a flat would be termed a bull trap or a bear trap depending on which way the market was moving.

Now look at the second chart with the straight red channel.
I just sold this pair and if I am wrong then I will gladly take a 50 pip stop and try another short later. If this is regular flat then it is going down to the 8050 area. I want to be on that train but I don't want to go broke trying to get on it.


Good Trading Everyone,
Dave

 

[JahDave]

I've been long on this pair for several weeks, but I am out now on the sidelines.
I was surprised that the Yen did not make a pullback today so I gave the situation a bit of thought. I think people are afraid to short because the Japanese government did come out today and say that they would intervene again if necessary, but on the other hand if this pair hangs around where it is people are scared to buy it because they don't know if it will keep going up. I am counting today's move up as a nearly completed wave 1 and I think that this pair will probably go into an extended shallow wave 2 unless the Japanese sell off more Yen.

It certainly appears that the USD_JPY is in a shallow wave 2. I have placed a buy order at 86.02 with a stop at 85.70 because this pair could drop some more before it goes up again.

 

[JahDave]

Usd_jpy

It certainly appears that the USD_JPY is in a shallow wave 2. I have placed a buy order at 86.02 with a stop at 85.70 because this pair could drop some more before it goes up again.

I canceled my 86.00 order and just bought at 85.07 with a stop at 84.70