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Below is the COT data for EURO futures and options contracts since 2009.
We are now sitting just below a 10yr high in open interest and net positions from speculators.
The major players in the market are shifting from the extreme in bullish positions,
And a bearish divergence form the underlying price is now well underway.

Take a look at what happened in 2014, speculators shifted to a bearish stance when the net position turned negative.
And immediately the price collapsed from about 1.40 to the low at 1.05.
In-fact,
Each major divergence in net positions,
Precedes a large move in price.

If you take this data,
along with the long term wave count,
You have a very convincing argument in favor of the USD in general.
Watch out Dollar bears!

 

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UPCOMING RISK EVENTS:


USD: Prelim GDP q/q, Chicago PMI, Pending Home Sales m/m, Crude Oil Inventories.
EUR: CPI Flash Estimate y/y,
GBP: n/a
JPY: n/a

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EURUSD

[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_separator border_width="5"][/vc_column][/vc_row][vc_row][vc_column width="2/3"][vc_custom_heading text="30 min" use_theme_fonts="yes"][vc_column_text][/vc_column_text][/vc_column][vc_column width="1/3"][vc_custom_heading text="4 Hours" use_theme_fonts="yes"][vc_column_text][/vc_column_text][vc_custom_heading text="Daily" use_theme_fonts="yes"][vc_column_text][/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]My Bias: long term bearish
Wave Structure: Topping in wave [B] black.
Long term wave count: lower in wave [C] black.

EURUSD dropped impulsively, out of the recent sideways corrective action this afternoon.
The sudden nature of the drop is in keeping with the alternate wave count.
So, the question is;
Has EURUSD topped out for good, or is this a larger wave [iv] green.

Daily MACD and RSI both suggest that this is a major top.
Both have diverged bearishly from the price,
And the price has just broken down through the 200MA on the 4hr chart.
All consistent with the idea of a top in place.

On the short term chart,
We need to see a impulse wave to the downside
to add weight to the technical situation.

The recent decline can be labelled as a five wave structure.
So, wave (ii) should trace out a three wave rally into about 1.2350.
If that happens,
Then the wave count will be in line with the technical setup and the price will be primed for a large selloff.

Tomorrow;
watch for a three wave rally in wave (ii) to begin.
initial resistance lies at the previous wave 'iv'.

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GBPUSD

[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_separator border_width="5"][/vc_column][/vc_row][vc_row][vc_column width="2/3"][vc_custom_heading text="30 min" use_theme_fonts="yes"][vc_column_text][/vc_column_text][/vc_column][vc_column width="1/3"][vc_custom_heading text="4 Hours" use_theme_fonts="yes"][vc_column_text][/vc_column_text][vc_custom_heading text="Daily" use_theme_fonts="yes"][vc_column_text][/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]My Bias: short below parity in wave (5).
Wave Structure:  completing wave (4) blue correction higher.
Long term wave count: decline in wave (5) blue, below parity

Cable declined in three waves in a possible wave 'e' grey.
Although it was a close call this afternoon,
Wave 'e' remained above wave 'c' by a couple of pips!

the triangle wave 'iv' pink is now complete
and wave 'v' should carry the price into about 1.4350 to complete the larger pattern.

Tomorrow;
Watch for a small degree higher low above 1.3857 to kick off wave 'v'.
A break of 1.4070 will confirm that wave 'v' has begun.

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USDJPY

[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_separator border_width="5"][/vc_column][/vc_row][vc_row][vc_column width="2/3"][vc_custom_heading text="30 min" use_theme_fonts="yes"][vc_column_text][/vc_column_text][/vc_column][vc_column width="1/3"][vc_custom_heading text="4 Hours" use_theme_fonts="yes"][vc_column_text][/vc_column_text][vc_custom_heading text="Daily" use_theme_fonts="yes"][vc_column_text][/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]My Bias: LONG
Wave Structure: rally in wave [C]
Long term wave count: wave [C] is underway, upside to above 136.00

The price has again pushed higher today
which strengthens the short term bullish outlook.
The rise is so far in three waves and has not yet broken initial resistance,
So, there is an element of doubt hanging in the air as always!

If EURUSD has topped,
Then we can definitely expect a USD rally across the board eventually.
USDJPY will be the first to register that rally.

Wave '3' pink on the short term chart,
must now carry the price above 107.89 to stay bullish in the short term.

On the 4hr chart,
Momentum is bullish and The 50MA is turning upwards.

For tomorrow;
watch for a break of 107.89 and a push towards the upper trendline in wave '3'.

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DOW JONES INDUSTRIALS

[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_separator border_width="5"][/vc_column][/vc_row][vc_row][vc_column width="2/3"][vc_custom_heading text="30 min" use_theme_fonts="yes"][vc_column_text][/vc_column_text][/vc_column][vc_column width="1/3"][vc_custom_heading text="4 Hours" use_theme_fonts="yes"][vc_column_text][/vc_column_text][vc_custom_heading text="Daily" use_theme_fonts="yes"][vc_column_text][/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]My Bias: market topping process completing
Wave Structure: Impulsive 5 wave structure, topping in an all time high.
Long term wave count: topped in wave (5)

The decline in the DOW today looks corrective in a possible wave 'iv' pink.
Wave (c) is well on track to complete in five waves.
The minimum target for wave 'v' lies at 25799.

Wave 'iv' must hold above 25155 for this count to remain valid in the short term.

The rise off wave [i] remains in a three wave form
And, the 4hr chart now shows a bearish momentum divergence.
So the rally is drawing to a close.

Tomorrow;
watch for a final rise in wave 'v' pink to a minimum of 25799.
At that point I will shift focus to the downside in a possible wave [iii].

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GOLD

[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_separator border_width="5"][/vc_column][/vc_row][vc_row][vc_column width="2/3"][vc_custom_heading text="30 min" use_theme_fonts="yes"][vc_column_text][/vc_column_text][/vc_column][vc_column width="1/3"][vc_custom_heading text="4 Hours" use_theme_fonts="yes"][vc_column_text][/vc_column_text][vc_custom_heading text="Daily" use_theme_fonts="yes"][vc_column_text][/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]My Bias: Long to a new all time high above 1827.
Wave Structure: Impulse structure to a new high.
Long term wave count: wave (3) above 1666.

I have switched the short term chart to the alternate wave count this evening.
The wave pattern in wave [ii] green may be completing a triple combination correction.
And that would explain the 'false start' of the interim high!

Wave 'c' of (c) is nearing completion as I write.
Wave 'c' should trace out a five wave pattern as labelled,
The minimum target for wave 'c' brown lies at 1307.
A touch of the lower trendline will carry the price to 1304.

Tomorrow;
Watch for the completion of the wave [ii] at about 1307.
We should see a spike higher out of support to begin wave [iii].

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U.S CRUDE OIL

[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_separator border_width="5"][/vc_column][/vc_row][vc_row][vc_column width="2/3"][vc_custom_heading text="30 min" use_theme_fonts="yes"][vc_column_text][/vc_column_text][/vc_column][vc_column width="1/3"][vc_custom_heading text="4 Hours" use_theme_fonts="yes"][vc_column_text][/vc_column_text][vc_custom_heading text="Daily" use_theme_fonts="yes"][vc_column_text][/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]My Bias: topping in a large correction wave [4].
Wave Structure: Double combination higher in wave [4] red.
Long term wave count: wave [4] target $63 - $70

So far so good for the short term count in Crude.
The price has dropped in a possible impulsive move off the high of wave [ii].
The ideal scenario form here would be a break of support in wave (i) grey,
With a corrective three wave rally in wave (ii),
This would create a bearish Elliott wave signal off the high,
And set up the price structure for a large decline in wave [iii] brown.

first things first though!
Lets see if the price creates a five wave decline from 63.98.
A brak of 60.75 would strengthen the bearish case from here.

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