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Decision time for Cable....

EURUSD

30 min

4 Hours

Daily

My Bias: short in wave (3) red.
Wave Structure: downward impulse wave
Long term wave count: lower in wave (3) red
Important risk events: EUR: n/a. USD: CPI m/m, Retail Sales m/m, Industrial Production m/m, Prelim UoM Consumer Sentiment.

 

Hello everyone!
Hope the day treated you well!

EURUSD took another hit today,
The decline again looks impulsive to the downside.
So the probability of an important high at the recent top are rising after todays price action.
The price broke down through 1.1382 which does add weight to the current wave count.

I have relabelled the decline with two degrees of trend.
This accounts for the overlap which occurred at todays high.
This is now labelled wave 'ii' pink.

The rise in price this evening is viewed as a developing correction in wave '2' grey.
this wave should not rise out of the parallel trend channel shown on the short term chart.
A break of resistance at 1.1455 would rule out this bearish setup.
But for now, the bearish wave count does fit well.

The 4hr RSI registered a momentum sell signal today also,
So the evidence of a top is lining up.

For tomorrow;
Watch for price to reach the upper trendline at about 1.1430,
And turn back down into wave '3' grey.

GBPUSD

30 min

4 Hours

Daily

My Bias: short below parity in wave (5).
Wave Structure:  continuing impulsive structure to the downside in wave (5)
Long term wave count: decline in wave (5) blue, below parity
Important risk events: GBP: n/a. USD: CPI m/m, Retail Sales m/m, Industrial Production m/m, Prelim UoM Consumer Sentiment.

Cable did the exact opposite of EURUSD and showed some strength today.
Todays rise in price is still best viewed as a three wave structure,
But the price must turn down quickly to remain fully bearish in the short term.

So far the price has failed to break below the declining trend channel shown on the short term chart.
Despite the overall indications of a topping market.
The possibility still hangs in the air of another run up into the 1.3200 handle to fulfill the alternate wave count.
I have shown this alternate count on the short term chart circled in red.

On the 4hr chart,
The alternate wave count would allow for the price to hit the upper trend line labelled wave 'C' red.
Either way, both wave counts shown are still long term bearish!

If the price rises above resistance at 1.2983,
then we will then I will switch to the alternate wave count.
This could offer a short term opportunity to the upside,
If a low risk entry presents itself.

For tomorrow;
1.2983 is my point of focus.

USDJPY

30 min

4 Hours

Daily

My Bias: LONG
Wave Structure: rally in wave [C]
Long term wave count: wave [C] is underway, upside to above 136.00
Important risk events: JPY: n/a. USD: CPI m/m, Retail Sales m/m, Industrial Production m/m, Prelim UoM Consumer Sentiment.

USDJPY created a new low by 8 pips, in the overnight trade.
The low of the structure so far is at 112.86.

Even though a correction was expected;
The decline in wave 'iv' is much steeper than I had anticipated,
which raises the possibility that the alternate count is in fact the correct interpretation.

The alternate wave count will be triggered if the price declines below 112.46.
and support for the alternate wave count comes in at 111.79.

Momentum on the 4hr chart has not registered an overbought signal since the 9th of may!
So there is no sign that the recent rally is over just yet!

For the next few days;
I will be watching how this current decline phase plays out.
It will give us some clues as to which wave count is correct.
If todays rise continues,
Then wave 'v' brown will remain the preferred count.

DOW JONES INDUSTRIALS

30 min

4 Hours

Daily

My Bias: market topping process ongoing
Wave Structure: Impulsive 5 wave structure, possibly topping in an all time high.
Long term wave count: Topping in wave (5)
Important risk events: USD: CPI m/m, Retail Sales m/m, Industrial Production m/m, Prelim UoM Consumer Sentiment.

Stocks hit a plateau today around the all time highs.
This action points to small corrective wave under way,
And signals another push higher over the next day or so to complete the current wave 'b' pink.
I have shown a parallel trend channel around wave 'b' pink,
The upper trend line suggests a high at about 21650 to complete the three wave structure off the wave 'a' low.

The outlook for next week is still lower in wave 'c' pink of the contracting triangle.
So for tomorrow watch for a short pop up to new highs to complete wave 'b' pink.
And a possible initial decline into wave 'c'.
If the triangle idea plays out as planned,
Then a low risk opportunity will present itself at the wave 'e' low.

GOLD

30 min

4 Hours

Daily

My Bias: Long towards 1550
Wave Structure: ZigZag correction to the upside.
Long term wave count: Topping in wave (B) at 1550
Important risk events: USD: CPI m/m, Retail Sales m/m, Industrial Production m/m, Prelim UoM Consumer Sentiment.

GOLD declined today in a three wave form off yesterdays high.
This points to a corrective decline today, rather than a new down turn.

If the price remains above the interim low at 1213.52,
and pushes to a new weekly high above 1225.75,
Then we have a five wave structure in play off the recent lows in a possible wave 'i' brown.

This structure needs to develop further to give us a bullish signal, but it is a definite possibility right now.
I have labelled todays low as wave '4' pink,
A further rise from this point will be viewed as wave '5' pink.

For tomorrow;
Watch for the trend channel to hold,
And an impulsive push up towards 1236 to occur in wave '5' pink.
A break of 1213.52 will put a hold on the current wave count.