Forex Update

EURUSD Breaks Out Of the Range, Now Headed to 1.3250/1.3300

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

NZD/JPY Looks Bearish Against 86.40

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 Turns Bearish After Close Beneath Trend-line

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.

Crude Price Testing November Trend-Line; Break Opens Door For $83

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

EUR/USD Could Make Reversal Down to 1.2900/50 From 1.3100 Resistance

The EUR/USD extended another 200 pips higher since Friday, so now we are even more confident that low on the pair is in place, as expected due to the ending diagonal, reversal pattern placed in wave 5). Recovery from the 1.2747 low is very strong, so we think it represents only one part of a larger recovery that could extend up to 1.3200 in April.

At the moment, we are tracking wave A) that is already testing important 1.3050-1.3100 resistance area back from mid-March, where there was also a gap that occurred on 18th of the moment. This zone could cause a reversal in price. We would not be surprised to see a top formation around current levels followed by a corrective pull-back in wave B) back to 1.2900-1.2950 zone (NFP report zone) over the next few days.

AUD/USD Turns Back In Bullish Mode As Price Exceeds 1.0500

The AUD/USD moved through 1.0500 swings which mean that wave II pull-back is complete and that larger uptrend is back in progress again. Rise from 1.0346 cannot be counted impulsively so we believe that the AUD/USD will move much higher in the next few days, maybe even weeks if we consider a possible wave III rise even up to 1.0740 Fibonacci extension level.

However, we always tend to focus on minimum expectations, so we expect to see 1.0600 as a first target (1.618 x wave II). Before that level is seen, the pair could go through a corrective retracement in blue wave (2) back to 1.0450/60 support zone. The pair however, remains in bullish mode as long as 1.0346 holds.

Forex Analysis by Gregor Horvat at ForexPros. com

S&P500 Found A Support And Now Looking Back To New High

S&P500 fell sharply lower on Friday, but only into third leg down from 1573 top. Decline from the top is labeled as an a)-b)-c) which is a corrective pull-back called a zig-zag.

This is a bullish pattern which means that uptrend could resume while 1540 isn't breached, especially if we consider that recovery from latest swing low is already showing impulsive qualities.

We want to stay with a larger trend, which is clear up on stocks, so push back to the highs should not be a surprise.

USD/JPY: Headed Back To The Highs

The USD/JPY broke sharply higher, which was expected from a technical perspective. Price accelerated strongly after break out of the corrective channel (circled zone). We can see that price made a very strong move to the upside in a very short period of time; clearly the personalty of an impulse so we think its wave (iii), part of a new five wave rally. Resistance for this wave (iii) comes in around 95.60-96.15 zone, from where we could see a fourth wave retracement back to 94.60 area. It seems that the USD/JPY pair is headed back to the highs.

Forex Analysis by Gregor Horvat at ForexPros. com

AUD/USD: Reversal Pattern Is Pointing Towards 1.0375

Sharp impulsive reversal higher in this week suggests that the AUD/USD pair 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.

The pair also tested and reversed 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.

USD/CHF: Minor Pull-back Within Uptrend

The USD/CHF pair accelerated higher at the end of the last week, slightly through the upper channel resistance line which is a bullish signal. As such, we are now observing a new wave count with possible impulsive rally underway to 0.9500 area, while 0.9335 is not breached. Note that current pull-back from the latest high is quite slow, usually an important sign for a corrective price action. As such this pull-back could represent wave 4 in the middle of ongoing wave 3) that could reach 261.8% extension level of wave 2).

Forex Analysis by Gregor Horvat at ForexPros. com

EUR/USD: Bearish But Overlapping

After quite a slow price action in this week from a 1.3018 low, we decided to adjust the wave count and are now looking for one leg down. The reason is the structure of a recent minor recovery, labeled on the chart as wave B which is looking corrective. As such, we think it may be just another pull-back within an ongoing bearish trend. We could see a test of 1.2950 in the sessions ahead, but keep in mind that these are final stages of a corrective movement; our primary focus will be bullish when pair bottoms.

The fact is that despite strong bearish momentum decline from 1.3710 still can be a corrective move, because each for each bounce, the market also made an overlap with former swing low.

USD Index: Strong Rally But Approaching Resistance

USD index recovered very sharply last week but don't let the strong rally trick you. The fact is that 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. As such, larger trend for this market remains down, but only impulsive weakness from that resistance and back to 80.30 figure can confirm the bearish case. In such case we will look for a fall through wave (A) supports. In fact on a weekly chart below we are also observing a huge head and shoulders pattern while 84.00 level is not breached.

Forex Analysis by Gregor Horvat at ForexPros. com

USD/CAD Could Make A Pull-back from 1.0280/1.0310

USD/CAD is higher, but pair could be in final stages of an uptrend in wave (iii) as we can count five waves up from 1.0000 with current fifth wave approaching to some key Fibonacci resistance levels around 1.0290.

We know that after every five waves correction follows so reversal from here would not be a surprise but pull-back will be temporary blue wave (iv) that may retrace back to 1.0150-1.0200; wave four zone of one lesser degree. Keep in mind that larger trend for USDCAD is up, so we will continue to look higher after a pull-back while 1.0087 invalidation level is not breached.

Gold Weakness Could Extend

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.

Forex Analysis by Gregor Horvat at ForexPros. com

GBP/USD: Strong Weakness Could Accelerate After 1.5267 Break

Cable extended even lower yesterday, with very sharp decline during US trading hours. We know that sharp and big moves usually represent wave three that is part of an impulsive, five wave cycle. As such, we updated the count that is pointing for more GBP weakness in the days ahead. We are tracking wave three of three now that may reach 1.5000 level in the very near-term. Meanwhile any pull-backs should prove corrective while price is trading below 1.5440.

The weekly chart indicates that price is well below 2009 support line and now also took out the swing low from January 2012, which could be very ugly for GBP. Larger count suggests that pair is at the start of big wave (C ) down.

Forex Analysis by Gregor Horvat at ForexPros. com

EUR/USD: Pullback Within Corrective Decline

The EUR/USD is in recovery mode after a sharp fall down to 1.3300 last week. For now, rally from the lows cannot be counted in five waves, and the pair is also still trading well below 1.3518 invalidation level. Therefore, a complex corrective decline from 1.3710 is incomplete, and the market will make one more push down, towards 1.3250 in this week to complete wave C of a second zig-zag that we are tracking. The pair is now testing a very important level around 1.3430/60 which appears to be ideal resistance zone for wave B; 61.8% retracement and also wave B equality from a second zig-zag. An overlap with 1.3370 would confirm the bearish view. Any new, aggressive shorts should have stops above 1.3518.

Forex Analysis by Gregor Horvat at ForexPros. com

Are You Swimming Upstream?

SALMON HAVE TAUGHT US all we need to know about trading: You can't fight the stream forever, you may get eaten by a bear, and if by miracle-of-miracles you make it, you're going to die. Trend trading is best done when there is a trend. You can't impose a trend trading strategy on a non-trending market (and expect it to work anyways).

The above is what is feels like trading against the trend. treacherous, exhausting, and will most likely lead to your demise.

Most of my accomplishments have been with the flow, with the tide, with stream - pick your water analogy. That's not to say I've never worked hard, but the work seems to open doors, opportunities, and better ideas. I think trend following is this truth plotted on a price chart.

USDINR, EURINR and GBPINR Forex Update by KediaCommodity

USDINR MARKET UDPATE - Rupee fell to its lowest in nearly a month hurt by weaker local shares and a slump in the euro following weak economic growth data. The weakness in the stock markets ahead of the budget has raised concerns about future capital inflows, which has been crucial to the rupee's fortunes, making it one of Asia's top winners in 2013 so far. That has been reflected in the rupee's performance which fell 1.3 percent this week, its biggest weekly loss in three months. India's foreign exchange reserves were at $294.54 billion as of February 8, compared with $295.16 billion in the previous week, the Reserve Bank of India (RBI) said.

Bullion, Gold, Silver and Crude Oil Forex Update by KediaCommodity

MORNING UPDATE BULLION - Bullion ended lower extending a week-long trend when several bearish factors, including a rising dollar ahead of the G20 meeting, conspired to push prices below key chart support levels. Softer investor appetite for the precious metal, a dearth of physical demand from China during its Lunar New Year holiday and gains in the dollar pushed the precious metal down. Early selling provoked technically-driven selling when several key support levels were ruptured on the way down.

DAX Suggests More EUR/USD Weakness After The Pull-back

German DAX is in down-trend in this week same as EUR/USD from Feb 13 high. Also, both markets reached new lows this morning at the same time, so we can say that correlation between these two is very tight. This tells me that for near-term predictions on EUR/USD we should focus on DAX more often and not so much on US stock market which is still in uptrend. OK, now let’s go to see DAX intraday structure. I can count five waves down from 7734, with a triangle in wave iv). That’s very important. Why? Because triangles occur prior to the final move of the larger pattern, so our wave v) should then be last leg in wave (i).

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