Forex Update

China's yuan weakens against US dollar

yuan-vs-dollarBeijing, Sep 6 : The Chinese currency renminbi or yuan retreated 32 basis points to 6.1728 against the US dollar Friday, according to the China Foreign Exchange Trading System.

In China's foreign exchange spot market, the yuan is allowed to rise or fall by 1 percent from the central parity rate each trading day, reports Xinhua.

The central parity rate of the yuan against the US dollar is based on a weighted average of prices before the opening of the market each business day.(IANS)

EUR/USD Bounce Back to 1.3220-1.3250 Before Downtrend Resumes?

EUR/USD Bounce Back to 1.3220-1.3250 Before Downtrend Resumes?EUR/USD is trading nicely lower for the last two weeks, which could be start of a new larger impulsive bearish trend. Notice that decline from 1.3400 is much larger compared to first leg down from 1.3450.

Well, as we know third waves in the middle of a five wave decline are typical the longest, so we suspect that market is forming an impulsive decline, now with back wave 3 in progress that can extend even down to 1.3020 level while market trades beneath the upper trend line of a base channel.

EUR/USD: Forming A Major Turning Point For The Year?

EUR/USD: Forming A Major Turning Point For The Year?EUR/USD is trading nicely lower for the last week or so which could be start of a new larger impulsive bearish trend. However, decline from 1.3450 is actually still in three waves so corrective outlook must not be ignored but we will stay with current sentiment and focus on the bearish scenario as long as 1.3400 holds. Ideally market is now in the middle of an impulsive wave 3, and broken support channel line is important evidence for this count, because this breakout usually causes an acceleration that makes wave three the longest and sharpest wave.

EUR/USD: Bearish Waves Moving Toward 1.3200-1.3150

The EUR/USD is finally trading lower, clearly in an impulsive fashion from 1.3400 which is a third leg of decline. Ideally this represents an impulsive three of a larger five wave moves.

Notice that the price also broke and closed beneath the rising trend-line of an ending diagonal, that is another very important sign of a changed trend from bullish to bearish mode. If we are correct, then the pair is now heading down to 1.3150 in the near term.

USD Strength, Stock Weakness On U.S. GDP

USD Strength, Stock Weakness On U.S. GDPUS Prelim GDP q/q came out 2.5% vs. 2.2%. USD moved slightly higher against it's rivals, hitting a new high against the EUR and CHF. US stocks futures are slightly lower and it seems there is more ahead.

DJIA futures reversing from 38.2% Fibo, but still need 14780 break for decline into fifth down towards 14700. DJIA 1h Elliott Wave Analysis EUR/USD pair hits 1.3231 after the US GDP report and based on the sharp decline from 1.3342 we could see an extension down to 1.3200 in the next two sessions, either within current wave (iii) or after (iv). EURUSD 30-min Elliott Wave Analysis

USD/CAD: Price Could Extend Up To 1.0650

USD/CAD: Price Could Extend Up To 1.0650On USD/CAD we are tracking an impulsive price action from around 1.0280 which is still incomplete as we need five waves to the upside.

In fact, in this week we have seen only a three wave set-back from the latest swing high which is a corrective structure, so we think that larger uptrend will resume soon so we labeled current retracement as wave 4, which means that we expect another push higher, into wave 5 that will be targeting 1.0620/1.0650.

This bullish leg could start soon if we consider that pair already reached a very typical 38.2% retracement area for fourth waves.

Gold: A Corrective Retracement?

Gold: A Corrective Retracement?Gold broke to a new high on Friday as expected after recent sideways price action above 1350 area, which was a fourth wave so now market is in wave five, final leg of an impulsive move which means that reversal in price may follow in this week.

Why? Because as Elliott Wave theory says, after every five waves correction will follow. In fact, 1400 is also a very important and strong resistance area so a turning point or new consolidation should not be a surprise. If current trend will extend higher within wave (v) then next resistance zone is at 1420.

Forex Analysis by Gregor Horvat at ForexPros. com

Tracking USD Long Set-Ups While EUR Is Below 1.34

Tracking USD Long Set-Ups While EUR Is Below 1.34We can see some USD strength at the start of this European morning coming back into the market which has been expected based on the latest intraday price action. We were looking for a three wave move down on USD/CHF with our members, and so far we can see that pair found a bottom nicely around 0.9190 from where we can see some encouraging upside reaction. Looks like we could be heading back to 0.9290, and possibly 0.9330 this week.

India's forex reserves up $205 million

India-forexMumbai, Aug 24 : India's foreign exchange (forex) reserves increased by $205.8 million to $278.80 billion for the week ended Aug 16, according to data released by the Reserve Bank of India (RBI).

The reserves had increased by $1.43 billion to $278.60 billion for the week ended Aug 9.

The foreign currency assets (FCA) - the biggest component of the forex reserves - grew by $211.7 million at $251.56 billion, the weekly statistical supplement of the central bank showed.

The FCA had grown by $1.45 billion at $251.34 billion in the previous week.

USD/CHF Could Be Forming A Bullish Reversal

USD/CHF hit a new low in this week, but is now again reversing into what could be the start of some larger, important turning point. Notice that we are tracking a corrective decline from 0.9750 which is actually part of a much bigger contra-trend move on a daily chart where we are tracking a triangle within a larger uptrend.

As such, we are ready on a bullish move on USD/CHF, but would have to see further strength from here and through the upper falling channel line, as well as the 0.9394 level to make sure that lows are in. The reading on the RSI is also interesting, where prices reversed from its own trend-line and suggests higher reading as we move forward.

Oil's Corrective Pause Appears Complete

CRUDE OILOIL is trading slightly lower after recent reversal from the upper channel resistance line shown on the four-hourly chart. However, we cannot ignore a three wave decline from July high, which is clearly a contra-trend movement, called a zig-zag in Elliott Wave theory.

With that in mind, we will continue to look for higher prices on crude oil as long as 102.15 support is in place. As such, we suspect that current set-back is wave (ii) that may look for a support in

USD/JPY: Sideways On Daily But Bullish On Intra-Day

USD/JPY found a support last week around 95-96 level as expected from where sharp rally suggests that market accomplished wave C) of a triangle and that price is now moving higher in wave D), still only fourth leg within complex correction. But we need five of them, so be aware of more choppy and overlapping price action in 95.80-101.50 range in days ahead before market breaks to the upside. However in the near-term price could reach levels around 99.00 before three wave rise in wave D) is complete. Support for current black sub-wave B comes in around 96.80.

USD/JPY: Daily

A Bearish Reversal?

GBP/USD is moving higher, but a rally from the July low is still in three legs with wave C) now near completion as price is approaching upper trend line of a corrective channel as well as equality level compared to wave A).

We can also count five waves up from 1.5100 wave B) low, so sooner or later reversal will follow, ideally from 1.5700.

USD/CAD Reversed Sharply To The Downside

USD/CAD Reversed Sharply To The DownsideUSD/CAD reversed sharply to the downside at the end of the last week, clearly in impulsive fashion, so structure is now pointing for weaker USD/CAD if we consider that rally from 1.0243 was made in three legs, called a correction. We are talking about wave B that has a high in place at 1.0442 from where we expect an impulsive extension down in wave C, back to 1.0243 and possibly even to 1.0150 in this week while 1.0442 is not breached. Recently minor correction has stopped at 1.0350-1.0370 resistance zone from where weakness could resume.

USDCAD 4h Elliott Wave Analysis Chart USDCAD 4h

EUR/USD: Bearish Reversal Unfolding

EUR/USD: Bearish Reversal UnfoldingEUR/USD has been trading higher last week and reached highs around 1.3400 region from where pair reversed impulsively and suggests that highs are in. As such, larger ending diagonal appears complete and is now pointing for weaker EUR/USD. We will be looking for sizable decline once 1.3180 support is taken out.

Why 1.3180 support is important? Because that's swing low of wave four, and when floor of wave four is broken this means that trend has changed and that bearish waves are underway.

Forex Analysis by Gregor Horvat at ForexPros. com

EUR/USD: Elliott Waves, H&S Patterns Pointing Lower

EUR/USD reversed higher three weeks back from around 1.2750 level, but recovery since early April still has a corrective look.

With that said, we think that move is complex correction and that larger trend will continue lower, especially if we consider a five wave decline from 1.3700.

If we are correct then current bullish leg should stop somewhere around current 1.3400 -1.3450 resistance area.

On the weekly time frame we are also observing a huge head and shoulders pattern, now right shoulders at resistance.

Forex Analysis by Gregor Horvat at ForexPros. com

India's forex reserves down $2.99 billion

India's forex reserves down $2.99 billionMumbai, Aug 9 : India's foreign exchange (forex) reserves decreased by $2.99 billion to $277.16 billion for the week ended Aug 2, according to data released by the Reserve Bank of India (RBI).

The reserves had increased by $960.2 million to $280.16 billion for the week ended July 26.

The foreign currency assets (FCA) - the biggest component of the forex reserves - fell by $2.15 billion at $249.89 billion, the weekly statistical supplement of the central bank shows.

The FCA had grown by $914.1 million at $252.05 billion in the previous week.

Higher U.S. Bonds=Lower USD/JPY

USD/JPY is in bearish mode because of higher US bonds and lower stocks. On the intra-day charts we see room for further weakness on USD/JPY as decline from 99.90 appears incomplete. We need five waves down, so keep an eye on fifth wave sell-off after a bounce in wave (iv) back to 97.35-97.50 short-term resistance.

Bearish USD/JPY is matching with higher US Bonds which are looking bullish for the near-term, for third leg up in wave C) within a larger wave (4) pattern which can be triangle or even a flat if wave C will unfold in five waves.

USD/CAD Turning Bullish

USD/CAD found a support around 1.02560 last week, from where the first reaction appears to be in impulsive fashion through the upper trend-line of a corrective channel. We know that impulses show direction of a trend or change in trend.

As such, we are looking higher now, and it's also because of a previous three wave decline from above 1.0600 which was a corrective move, so larger trend remains up and is now in continuation mode.

Current wave 2/B could be looking for a support around 1.0300-1.0330. Invalidation point for bullish outlook is at 1.0243.

Forex Analysis by Gregor Horvat at ForexPros. com

Can S&P500 Reach 1750, Or Even 1800?

S&P500 reversed sharply to the upside from 1550 support, clearly in impulsive fashion. As such, we labeled end of a corrective blue wave (4) at latest swing low from where we are now tracking a new bullish leg on stocks, this time towards 1750 or possibly even to 1800 region in coming weeks for fifth wave in III.

However, we must also be aware that wave five is final leg within impulsive rally so no question, corrective reversal will occur but at the moment we don't see it unfolding yet. On the basic chart below you can see where we think US stock market is at the moment.

Forex Analysis by Gregor Horvat at ForexPros. com

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