The S&P 500 is still trading higher, which is not a surprise as we are tracking an impulsive rally that should be sub-divided by five waves. Well latest corrective retracement to 1623 was wave (iv) so current new leg up should be wave (v) final leg in impulsive trend that could stop around 1655. Keep in mind that after every five waves correction follows, so if our count is correct then we will see a reversal back to 1623 swing zone.

Traders who are long will make tight stops, traders on the sideline will wait pull-backs. S&P 500

EUR/USD broke sharply lower last week after a break through the trend-line support connected from April lows.

This break usually leads to a continuation of a larger trend which in our case is down. For now, decline from the high is still in three waves, but we will go with one-two one-two scenario because of a larger bearish view for the EUR. With that said, we are bearish now and expect 1.2935 break that will put 1.2800 level in play for this week. Resistance for current wave (ii) comes in at 1.3030 followed by 1.3070.

On the other-hand, we will turn bullish only if we see an impulse back up to 1.3130 that will make wave (2) rally even more complex. EUR/USD

The USD/JPY broke higher last week, out of a triangle pattern that we have been tracking since mid-April. This triangle has been placed in wave four, so we must be aware of a bearish reversal in the next few days/weeks; this type of patterns always occurs prior to the final move of the larger trend. So current leg up should be our final leg; most-likely wave 5 of an ending diagonal. However, each leg in ending diagonal should be sub-divided at least by three waves, so that current pull-back is probably wave (b) with wave (c) yet to come - and that could hit the 103.00/103.50 level. After a completed ending diagonal we will be looking for a sharp reversal lower. A fall back beneath 100 would be a first but important sign for a completed ending diagonal and weaker prices ahead.

The EUR/USD fell sharply last week, closing well below 1.3034 swing low support which puts bearish price action in play. In fact, a decline from 1.3195 was very strong and sharp, which in many cases represents an impulsive wave and direction of a trend. As such, we need to respect this price action so it’s better to stick to the downtrend and look for possible short entries.

From an Elliott Wave perspective we are tracking one-two, one-two set-up with sub-wave (ii) now underway to 1.3020/50 resistance area.

The reason why the bearish price action could continue is a broken channel line on the Daily chart as shown below. We would turn bullish again only if the 1.3130 level is passed.

Mumbai, May 11 : India's foreign exchange (forex) reserves decreased by $2.06 billion to $294.30 billion for the week ended May 3, according to data released by the central bank.

The reserves had risen by $1.60 billion to $296.37 billion for the week ended April 26.

The foreign currency assets (FCA) - the biggest component of the forex reserves - fell by $299.7 million at $263.72 billion, according to the weekly statistical supplement released by the Reserve Bank of India.

The FCA had risen by $1.61 billion at $264.02 billion in the previous week.

Euro gained compared to USD after the statement of ECB' Mersch regarding the ABS market. European agencies are looking at ways to restart ABS market to increase the lending for SME sector.

The Euro gained further ground after the statement. There was speculation and the Euro was trading at 1.3160 compared to USD.

In terms of GBP/ USD, the demand was higher before the BoE policy decision today. GBP/USD was at 1.5539.

Indian currency lost further ground to USD after a good start for the day. USD-INR was at 54.25 while Euro-INR was at 71.40.

The Canadian dollar was one of the best performers last week, gaining strongly against the USD. We can see a sharp fall on the USD/CAD, back to the 1.0050 area, but still only into a third leg of decline from 1.0340, which is a structure of a contra-trend movements.

On cable we can count five completed waves-up in wave C that show signs of a top around 1.5606 because of the ending diagonal in wave 5, divergence on the RSI and now also accelerating price action below the trading channel, which suggests the pair is in the early stage of a minor wave (iii). Further weakness toward 1.5450 would be a strong and very important sign for further GBP/USD top.

AUD/USD is under pressure, having fallen sharply in the last 12 hours on speculation of possible coming rate cut from the RBA after worse than expected Chinese PMI figures (50.6 vs. 50.8 exp). Pair also extended lower after a sell-off on US stocks futures caused by bad U. S. ADP Nonfarm Employment numbers; 119K vs. 154K.

From a technical point of view AUD/USD has a nice pattern here; three waves up to 1.0380 followed by a sharp drop through the lower support line of a corrective channel. That’s a very nice clear bearish signal for the pair, so traders can consider shorts while the market is trading below critical level. We are considering new alert for members but it seems we will have to wait on FOMC statement and rate decision first.

The USD index extended its losses yesterday, falling through 81.70 swing low from mid-April, which makes a corrective decline from 83.50 much more complex than first thought.

We are now tracking a new five wave decline from 83.20, which represents wave (C), a final leg of a zig-zag in wave E that could look for a bottom around 80.80-81.20 area.

Mumbai, April 27 : India's foreign exchange (forex) reserves decreased by $485.9 million to $294.76 billion for the week ended April 19, according to data released by the central bank.

The reserves had risen by $1.40 billion to $295.24 billion for the week ended April 12.

The foreign currency assets (FCA) - the biggest component of the forex reserves - fell by $489.2 million at $262.41 billion, according to the weekly statistical supplement released by the Reserve Bank of India (RBI).

The FCA had risen by $1.38 billion at $262.90 billion in the previous week.

Oil is forming an impulsive price action from an 87.87 swing low. The reason is recent strong reaction towards the 92.00 figure yesterday - very strong and sharp in a short period of time. That's the personality of a third wave, so we think that the market is forming a five wave pattern.

With that in mind, be aware of more upside, this time towards the 93.00 mark. Current sub-wave four may look for support around the 91.00 level. The market will remain in bullish shape as long as 89.92 support is not breached.

Forex Analysis by Gregor Horvat at ForexPros. com

We turned bearish on AUD early last week after a daily close beneath the trend line connected from March lows.

Notice that recovery from there was made only in three legs, which is the corrective price action, so we are now looking for even weaker AUD as wave E in a big triangle wave IV) appears incomplete.

Ideally market is now in a second zig-zag headed beneath 1.0100 where we see a rising trend line connected from the 2011 low plus a 78.6% retracement compared to wave D.

GBP/USD has extended higher in the last two weeks after its broken trend-line connected from above 1.6300. As such, we labeled its recent big fall as a completed five wave fall in wave I, followed by a corrective bounce which we think is wave II.

That said, recovery from the lows is just temporary so we must be aware of a new sell-off once the pair breaks through the lower support line of a corrective channel. A close somewhere around 1.5050 or lower would suggest that the rally is done and weakness is underway.

Forex Analysis by Gregor Horvat at ForexPros. com

Mumbai, April 19 : India's foreign exchange (forex) reserves increased by $1.40 billion to $295.24 billion for the week ended April 12, according to data released by the country's central bank.

The reserves had risen by $1.19 billion to $293.84 billion for the week ended April 5.

The foreign currency assets (FCA) - the biggest component of the forex reserves - grew by $1.38 billion at $262.90 billion, according to the weekly statistical supplement released by the Reserve Bank of India (RBI).

The FCA had risen by $1.78 billion at $261.51 billion in the previous week.

The EUR/USD reversed sharply lower yesterday from 1.3200, clearly in impulsive fashion beneath rising trend-line from 1.2745 and as well as wave B) swing low. This is a very clear bearish price action that should send prices even lower in minimum three waves, possibly to 1.2900/1.2950 in the next few trading days. Meanwhile, the pair must not get back above 1.3200 critical level, but could see a pull-back to 1.3110 where a broken trendline may become a resistance.

Forex Analysis by Gregor Horvat at ForexPros. com

The EUR/USD finally broke out of a sideways price action into wave C); earlier than we thought but still in our primary direction. This wave C) now has room for even higher levels, towards 1.3250/1.3300 where we will be looking for evidence of a completed rally from 1.2745. Keep in mind that whole recovery is probably corrective), and that larger downtrend will most likely resume by the end of this month. A sharp fall from Fibonacci resistance levels and through support channel line will put the pair back in bearish mode.

Forex Analysis by Gregor Horvat at ForexPros. com

European shares and U. S. pre-market has been trading higher for the last couple of hours and caused some downside on USD and JPY.

Earlier we mentioned to our members that we will keep them updated regarding the JPY pairs as there could be some trading opportunity in the near future based on bearish S&P sentiment. Below we have NZD/JPY where decline can be counted impulsively, so current rally should prove corrective.

We would love to be short on that one but we need three legs up from 80.54. Current minor five wave rally in red labels represents wave (a) of a zig-zag, so more sideways and even upside price action to come. NZD/JPY 1H Elliiott Wave Analysis.

AUD/USD turned sharply lower and made a daily close beneath rising trend-line connected from March lows.

We also need to consider that the decline from 1.0580 is looking impulsive, with a strong and large move in a very short period of time.

As such, this leg must be part of a larger bearish sequence that should unfold minimum in three waves.

Ideally we will see a zig-zag down in wave (Y) of a complex wave E as shown on the updated count. In the near-term traders who will be interested to join the bearish trend may want to keep an eye on that broken trend-line that may turn into a resistance around 1.0420.

Oil fell sharply lower in February, making an overlap with 89.68 level. This invalidated our previous impulsive bullish count. As such, if recovery from November 2012 low was not impulsive, then it can be only be corrective on account of three wave movement, labeled as (a)-(b)-(c) up to 98 zone.

The interesting thing is that decline from 98 was also in three waves with a 90.27 overlap. This was probably wave X, part of a double zig-zag in red wave B) that now appears complete around 97.80, after the latest sharp decline towards the lower side of a corrective channel. We expect more weakness from here, ideally towards the 83.00 zone.

Forex Analysis by Gregor Horvat at ForexPros. com