Forex analysis by Marketsinside_com

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USDCAD - weekly chart

Ok. Now, let's see what are the possibilities to do our profitable mid term trade.

First, it is neccessary to define what the wave pattern is. In our case I call it to be a double ZigZag. And it looks like wave X is done. What we're looking for is a renewed bull market, which is supposed to reach levels above the top of wave W. This is where our forecast begins.

Second, the trendline from the top of wave b is passed. The market topped (wave i) and now it is near its previous bottom at 1.0211. We define that level as a critical. In other words - our stop level.

Third, we should have a confirmation signal, which will give us confidence that our scenario is under way and we can open a long position. That kind of confirmation is a breakthrough of the top of wave i.

 

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Usdjpy

The chart and the forecast that you're gonna see were made only using technical analysis and Elliott wave Principle. No news, no Central banks's statement.

Having this chart by our side, we had a forecast, scenario, stop level and a confirmation, which was suppose to show in which moment the scenario is confirmed and to give us more confidence that our forecast is about to come true.

Two days later USDJPY fell and hit the target. 460 pips in two days.

 

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US Dollar Index

You can find rallies even in messy corrections. You'll be able to that only if you follow the market in every step, adjust your analysis and wait for so called risk-free opportunities. Of course there is nothing like risk free thing in our life, but we, technicians have a special sentiment to third waves. They are the strongest, the most volatile, and of course - the most profitable opportunities on the market.

Thursday, March 04. A forecast (chart 1).
US Dollar Index - Rally.
It seems that the market is headed for another rally. Target at 80.90. Critical level at 79.83.

Breaf, but exact. It was one of those opportunities, that have only 10% risk. We've had wave i (five waves in it), then appropriate three-waves correction for wave ii, and a breakthrough of the top of wave i. In the language of conservative elliotticians that means that wave iii is in action. And we don't miss them.

That is what happened. The market reached our target (chart 2).

Good luck.

 

[Marketsinside_com]

I'd like to post here an article with a lot of interesting charts, but unfortunately the post editor doesn't give the possibility to do that. That's why I'm posting the link to the full article, related with some of the major price actions in forex.

 

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Show me some Trade - EURUSD

We saw a nice US Dollar rally this week and now you can find plenty
of explanations why did that happen. As always I think this is not very useful for those thousands of traders, investors and speculators, which sometimes need a forecast, based on a working methodology, such as Elliott wave Principle, and technical analysis. I don't know about you, but I'm sick of those guys who are being interviewed on the media, explaining why something happened on a market, after it has already happened. Yes, it's funny, but if you ask me, that's waste of time. Anyway, today I'll try to give you an example of how a good Forex analysis and forecast can turn into real trading. Show me some trade, again...

On March 24, I published an EURUSD forecast.

In that circumstances I took the decision to trade that forecast. I sold EURUSD and put my stop order at the critical levels. And all I had to do was to wait.

On the next day, March 25 the market reached my target and started to consolidate. I waited for a good level to close my position.

By making that one day exercise I took around 112 pips. Actually after I opened my short position I had to make a trip of 600 kilometers, and it was funny when I arrived and opened my account I saw that the market had reached my target and all I had to do was just to close the position.

It was again some good risk management. But the core of all this is the forecast and the analysis. You can use variety of trading strategies, depending on your temperament and will to risk, but the professional technical analysis is the most powerful weapon on a market.

 

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Usdjpy

Today I've decided to show you two charts, concerning the future perspective of USDJPY, because I think we saw one of the major confirmations for the scenario that I'm presenting in this article.

I think we saw a historical bottom in the end of 2009. It matched the wave pattern of the so called truncated fifth fave. To clarify these words, let's take a look at the monthly chart.

We've had a nice triangle for wave IV, and then breakthrough of the lower shoulder, followed by a messy fifth wave, that has broken most of the rules in the wave principle, but still matching the category of fifth waves. What is probably more interesting is why I think that this is a historical bottom, even though it is still above the bottom of wave III. Now, let's check on the second chart.

First of all, observe the divergence in the fifth wave. The trend was exhausting with every day. After the market bottomed , it made a high, then went back to the downside, but it didn't make a new low. Actually the opposite, this week we saw a breakthrough of the top of what I've labelled as wave i. Even more, this breakthrough is above the trendline, which gives us all the necessary evidences of a reversal:
1) The market didn't make new low
2) the trendline is exceeded
3) the market reached and passed the top of wave i.

All the three basic signs that technical analysis needs to warn you about a coming reversal. I've tried to paint what I expect to see in the next year and even longer. If you have the appropriate risk management, this situation here could turn out to be your trade of a lifetime.

 

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EURGBP - Keep an eye on the triangles

One of the most common types of contracting volatility is a technical figure, called triangle. It occurs when the market is hampered in its decision whether to continue its current trend, or to reverse in the opposite direction. According to Elliott wave Theory triangles happen only in waves B (or X), and iv.

The common understanding is that after a triangle is complete, the market continues it current trend. With that conclusion in mind, will take a look at two daily chart of EURGBP.

Scenario 1 - That beautiful triangle for wave IV is done, and the market is preparing a rally for wave V. To confirm that outcome, I would like to see price action above the two resistance lines. That kind of confirmation is needed to convince us that we see a technical figure breakthrough.

Scenario 2 - Here we discuss the triangle as wave X. As you can see here the direction is exactly the opposite from the first scenario. The confirmation is represented by a breakthrough of the triangle's lower line. This will launch the beginning of wave Y.

Both of the scenarios are equal in their possibility to happen. The purpose of this article is to warn you of a future high volatility on this market. Whether we will see the first or the second scenario depends on the intermarket analysis in the next weeks.

 

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GBPUSD - Elliott wave analysis doesn't count on news

...or just another example of how technical analysis tells you the story far before news or financial reports. Still lots of people think there are no ways to forecast the Forex market. And the only way to be with the trend is to follow news and headlines. But if you ask me, I can take the risk to say that these two types of usual events (news and headlines) are the things that can fool you the most. Or in the best way - they do tarry enough to make you just part of the herd. If that sounds to you like a non-sense, take a look at the recent headlines, concerning British Pound:

The pound tumbled to a 1-year low against the U.S. dollar last week, on mounting political uncertainty in the wake of Britain's tightly fought general election, which left no party with an outright parliamentary majority- Forex Pros

Yeah, it does sound convincing, doesn't it ? But before considering fundamental news as a pure truth, let's think for a second. The general elections in Britain were on May 06. The GBPUSD intraday trend started days before the elections, and even more - it actually wasn't influenced a bit by the elections. Yeah, that's right. And my proof here is the following chart, published on MAY 02.

Surprise ! Our subscribers knew about that the future 1-year GBPUSD low, four days before most of the people in Great Britain actually knew whether they will vote or not. That sounds funny, but it is not, because a lot of people loose their money every day relying on news. That is one of the few things that could bring a disaster to your trading account.

 

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USDJPY - Why targets are so useful

Ten years ago, when I started to study financial markets, I wondered why it is so important to set targets
in your analysis. I couldn't understand why knowing where the top could be is such a big deal. I thought that knowing the direction of the trend is enough to win money and to get rich. Of course I was a fool. Pointing targets in your analysis, doesn't matter intraday, short- or long term, is one of the most important factors for raising your trading account, or investment portfolio. Can you image what a blessing thing is to know where a trend could top ?! Knowing it could give you the power of the real money management. And to be more specified, take a look at that chart, regarding USDJPY, published on April 18:

Now, let's make two major conclusions:
1) Our subscribers knew that there is going to be another rally for wave v. And it really was.
2) The thing with fifth waves is that setting a target for the top means, that after that you expect a reversal. You know what happened after the target was reached.

 

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EURUSD - Escape from the Herd, now

I suppose it is very easy to be bearish on EURUSD now, right ? If you are, then you're just part of the other 97% of other bears. Do you know what happens when such percentage of the people thinks that a particular financial instrument will go to a certain direction. The market goes in the exactly opposite. That is the nature of the market psychology. And because this is hard to believe for some people, I would like to escort you to a short journey of the market psychology and the way markets trend and reverse. I don't want to convince anyone in anything, but just to show some facts that you may have forgotten.

In September 21, 2009 we published a chart, forecasting the mid term perspective on EURUSD:

Back then, we set up a target for the top at 1.5100. We warned our readers that now is not the time to buy Euro. Then was the time to close long trades and to prepare for a long bear market. But one of the most important signals, that warned us that there will be a top, was the 97% ot bulls. There was no one else to buy euros. We saw a market top at 1.5150.

But we said, that we expected reversal. All we needed to see was five waves down, followed by three-waves upside pattern and then a breakthrough of the first five's bottom. That happened on January 14, 2010:

Beautiful five waves down, and three waves up. It was clear and all we had to do was to warn our subscribers and to wait for the market to tell us whether we were right, or not. Couple of days after that chart was sent to the subscribers the market hit our third wave target.

Approximately two weeks after that we published our mid term perspective in an article called EURUSD - One chart, three letters, where gave a clear call, that we're gonna see an intensive bearish rally. Do you know what percentage of the traders thought like us ? 23 !

Yeah, it is easy to be part of the herd and to loose consistently your money. When 77 % of the people think that the euro is still in a bull market, and you shout that there is going to be, "an intensive landslide", almost nobody is listening. That is the herd magic. Only a few know and see the real future perspectives.

But let's get back to now. Near market bottoms traders' sentiment tends to go in its extreme values. Traders which are emotional and herding often sell near bottoms, and buys near tops.

Having this chart by your side, should warn you of what the market is about to do. To surprise the audience, again. Although we might see another low, it is clear that the market is just about to reverse and to go in the bullish side. All the charts you see here are part of articles that were written on our website and everyone could see them. But all the intraday surprises, critical levels, good places to go in the market, targets, market structure, we've been doing all the time. That is what we do in our Forex Bulletin.

 

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GBPUSD - big picture

We've been watching a falling Pound vs US dollar, for quite a long time. Since the beginning of August 2009 we saw a drop from 1.7052 to 1.4240. We were expecting that drop to happen.We followed every impulsive and corrective price action to the downside. But I think now is the time to look at the big picture and to reconsider whether the Pound is going to continue to fall against the dollar, or not. It is always important to keep an eye on the big picture. Actually that is the place every analysis and forecast should start from. In GBPUSD we have different scenarios, we want to show you.

In the first scenario, which I use as a primary, GBPUSD is ready to run for another high, above 1.7068. The wave pattern that I expect to see in this scenario is a double ZigZag. This probable rally for wave y is suppose to develop as a three-waves pattern, with A and C impulsive inside.

The second scenario is suggesting a triangle for wave B. This pattern takes long time to develop and they are very dangerous for trading, especially for those traders who use automated trading strategies. Be careful with triangles. If this scenario turns out to be chosen from the market, we could relax and wait for the completing of the pattern and choose some appropriate place to be on the market after that.

Notice, that in both of the mid term scenarios, we don't expect continuation of the current bear market. And that's our warning here. If you are short term short on GBPUSD, it will be nice to reconsider the market's direction. There are very interesting surprises that the Forex market is preparing for us.

 

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Usdchf

A reversal occurred. It probably was unexpected, at least if you're not chartist. If you're not, though, you had another place where you could have been warned about that coming reversal. At tops everyone seems to be optimistic and almost nobody could take the idea of a market reversal at serious. Almost nobody is the key sentence here. That warning was given in the following chart from June 06:

The reversal is a fact. But the market has prepared for us, the participants, lots of surprises. As always we'll do our best to warn you of a coming major price actions, with targets, critical levels, and market structure. Just like we've done it so far.

 

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US Dollar Index - Beware the extremes.

I still remember the early summer, when the dollar index was to levels around 88.00 and
the excitement was incredible. All the media and well-known analyst claimed that the bull market will not end soon and we're about to see more and more highs. Meanwhile, the sentiment indicators that I use, showed me that there were around 95% bulls at that time. Sentiments are not enough to forecast, but they are very useful to predict upcoming top or bottom on the market. So, I draw my wave count and I published marketsinside's Forex Bulletin on 6-th of June, where I wrote:

"US Dollar Index - Higher.
Still under the development of wave v of (i) or A. After we see a complete five waves, we can expect a short term reversal. The correction could be sharp and deep, so now is not the time to be bull."

Well, few days after the bulletin was published the market hit its high at 88.82 and reversed. Since the beginning of June til now we see a sharp and deep downside correction. Actually, it's much deeper that I expected. But guess what. Sentiment indicators are again showing some extreme levels of the investor's psychology and by that I am sure that the market will surprise a lot of people in the near future.

 

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EURUSD - Show me Some Trade

There are trading opportunities that lead you against the trend. They are dangerous, rare, and sometimes disappointing. But they exist. And if you are confident enough, experiences enough, and sure in your analysis, they are opportunities like the others. So let's go the example of one of the so called "against the trend" opportunities.

On November 01 I published my weekly Forex Bulletin, in which I suggested that we're gonna see another intraday rally in EURUSD. Here are the exact chart and the commentary.

"EURUSD - Correcting, then higher.
We expect to see another intraday low for wave e from the triangle, and after that is very likely to see another rally with appropriate target at 1.4208. Critical level at 1.3692."

And the market indeed rallied. Actually it passed just a little bit my target, but in general the forecast came true. What's more interesting what should you do, when your analysis tells you to expect a top, and that top actually occurs. After the market reached my target, I was waiting for some signs of at least an intraday reversal. The the market was grateful. I saw a downside movement, which had five waves in it, and then a sideways correction. It was enough for me. I waited til the market broke its low, and I opened my short position, with a stop loss level at the previous top. All I had to do was to wait for wave iii to develop. Having in mind the low time frame, the whole position was supposed to happen in a day.

After I saw the sharp downside rally that I was waiting for, some corrective hesitation for wave iv, and a new low for wave v, I decided that it's enough for me. I took my near 150 pips in a few hours. Yes, the market continued to fall, but at that time, I wasn't completely confident that I should keep my position. That's what I do. When I am not totally sure in my position, I close and stop. Confidence is the most needed sense for successful trading.

 

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Usdjpy

The majority of traders are now talking about the Japanese yen and the strong advantage that it takes against the US Dollar. Lots of volatility on the market in both directions is what attracts traders, especially those who like to trade in the small time frames.

Basically we suggest that the market is going below the historical bottom (79.50), to complete wave V. During that fall I would like to see some RSI divergence in the lower time frames. In other words, there's a big reversal gathering sentiment. But before seing that reversal, the market needs to exhaust completely. Ignoring today's ongoing excitement about USDJPY, I wouldn't advise any investor to take a long term short position on USDJPY. Signs of reversal will come at a time. Be patient and the market will reward you with good opportunities.

 

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EURUSD - Trading with Elliott wave

Market analysis is the basis of wining or losing on a market. But the real adventure, the real game is trading or investing on it. And what I find quite intriguing is that there are as many and different trading systems, as the number of people on the market. Everyone has his own trading system or methodology, depending on his temperament and will to risk. Now, I prefer to use a mixture of pure technical analysis, Elliott wave Theory and intermarket analysis, implementing all those three in my trading system that I call THE THIRD WAVE TRADER. Today I want to show you a brief log of two of my recent EURUSD trades. That major currency pair is what I trade mostly.

After we saw the sharp fall from 1.4286 to 1.3445 I was a little bit confused, because I expected to see a clearly impulsive pattern. I actually went on the market at that time. After the down move was done for that time, it had quite a choppy structure, which made me think that it's possible to be counted as wave a or i. Then we saw the correction to 1.3785 and I started to pay more attention to the market and to be more specific - to an eventual breakthrough of the previous bottom (1.3445). That's what THE THIRD WAVE TRADER claims to be the confirmation (or as some people call it - the signal). After the market confirmed that there is wave iii or c in action I opened my short position and put my stop loss right above 1.3785. As the market continued to fall I moved my stop loss in the major resistance levels that my Elliott wave count showed.

Obviously my analysis was wrong at a time and the market hit my stop at 1.3198, returning me a profit of 250 pips. Some will say that I missed even more pips with that risk management, but I will say in my defense that it is part of my trading psychology. Doesn't matter how strange this may sound to you, but I prefer to let the market close my trades. I rarely close positions manually.

But here's the thing. After my position was closed by the market, I moved in a 30 minutes chart and saw some impulsive pattern, which I thought could be the beginning of an A-B-C pattern, or even renewed short term bull market. After the market confirmed that wave iii or c is ahead, I opened a long trade. As the market climbed higher in a few hours, I moved my stop to a level that I couldn't lose money and even take some small profits. And I waited.

After a short sideways price action, the market exploded and this time I closed my position manually, because I had my doubts whether the really is going to continue, or not. So I added another 180 pips in that day. So the sum of my two trades was 430 pips, for three days. But that is not what is actually so worthy. The key sentence here that I want to underline is - serenity while you trade. This confidence and easiness is what THE THIRD WAVE TRADER gives. And right now, I turn again on EURUSD, cause the market seems to be preparing new surprises for us.

 

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EURUSD - How to use bottoms

Some of the best trading opportunities come when a market bottom is expected. Depending on the time frame you can decide what kind of risk management you can use. Determine your target, your stop loss size, and go for some profits. That's exactly our case here. On January 10 EURUSD made an intraday bottom, followed by a pullback. After sawing the low, I tuned up myself for an upside impulsive pattern, which was suppose to get me ready for a possible intraday trading opportunity. The I saw something that looked like a leading diagonal, then a choppy correction, followed by a breakthrough of the previous high.

That was enough for me to be confident in my puzzle analysis and also in my THIRD WAVE TRADER methodology. I went long, with a stop loss at the previous bottom. The market started to climb, with appropriate sideways corrections. I was looking for a good spot in the RSI to confirm that the intraday trend starts to exhaust.

And there's the moment I decided to take my profit. It all happened in just one day. A few hours actually. What's more interesting is that at the moment of opening my position I risked 40 pips, but my profit was 347 pips. That's one of the rules I have in my personal trading. Never start a trade, which has bigger risk than target.