members content

GOLD bullish price action - DOW contracting triangle.

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: Final CPI y/y. USD: Empire State Manufacturing Index. 

Both Cable and EURUSD have both spent the last few months cycling through variations of corrective structures,
Sooner rather than later,
these correction s will complete and the USD will rocket higher against the both,
Much in the way the USD has rallied against the Yen lately.

Todays action in EURUSD has again thrown doubt on the very short term wave count.
The price has risen back up towards the resistance at the high of 1.1489.
I have labelled the short term action as an impulse wave lower in wave 'i'i pink,
And an expanded flat correction higher in wave 'ii' pink.

This is the only valid bearish wave count off the recent high.
If 1.1489 is broken,
Then I will have to re-examine the rally
and possibly switch to the alternate wave count shown on the Daily chart.
Which would allow for the price to rise to a high in the region of 1.2300.

In the longer term,
I am still expecting a very large rally in the USD against the EURO,
So that is where I will stay focused.

For the early trade next week;
Watch for 1.1489 to hold and for the price to turn down again,
If 1.1382 is broken again to the downside,
It will be time to turn fully bearish again.

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: Empire State Manufacturing Index. 

I have switched to an alternate wave count in GBPUSD today.
The price rallied above 1.2983 and triggered the alternate count.

This new wave count is best viewed on the 4hr chart for clarity.

The whole structure off the election lows last year is now viewed as an A,B,C rally in red.
Wave 'A' red, traced out at 3 wave structure,
Wave 'B' red completed as a contracting triangle,
And wave 'C' red is now completing another three wave structure higher shown in a parallel trend channel.
This rally should complete in the region of 1.3250 as mentioned before.

On the short term chart you can see how wave [c] green has played out so far.
It is shown as a three wave structure itself,
wave (a) brown completed five waves,
Wave (b) brown completed in three waves,
And wave (c) brown is now tracing out another five wave structure to the upside.

Todays rally is labelled wave 'iii' pink
This leaves wave 'iv' and 'v' pink left to finish the whole structure.

For Monday,
watch for wave 'iii' to complete and wave 'iv' to begin.
Wave 'iv' pink must now drop below 1.2950,
the wave 'i' high.

We are very near the end of this whole 9 month long corrective structure right now.
the down trend will be coming back to bite soon enough.

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: Empire State Manufacturing Index. 

USDJPY triggered the alternate wave count also today.
The decline dropped below the invalidation point at 112.46 and bottomed at 112.25.
The best way to label the decline so far is as a three wave structure in wave (iv) green.

The price has bounced almost 50 points off the low this evening,
so the bottom may well be in at the lows of the day.

The rising trend channel shown projects a high for wave (v) green at about 115.30 or so.

For the early trade next week,
If we get a break above 112.85 early next week,
That will signal that the market has turned up again.

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: Empire State Manufacturing Index. 

The DOW pushed higher today as expected in last nights analysis.
The market is up about 125 points into this evenings high.

The price is now approaching the upper trend channel,
and is likely to turn back down again in wave 'c' pink early next week.
The target for wave 'b' pink was at 21670 and the market stands at 21650 as I write.
So, the price is ready to turn now.

Wave 'c' should trace out a three wave structure.
The initial target for wave 'c' pink lies at 21374,
Where wave 'c' reaches a 61.8% retracement of wave 'b' pink.

At that point it will be time to look at a possible entry on the long side to ride wave (v) grey to the end!
For Monday I will be watching for signs of a turn into wave 'c' pink.

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: Empire State Manufacturing Index. 

As suggested last night, The trend channel held above 1213,
And GOLD rallied $18 dollars into todays high at 1232.82.
The probability of a significant low on the cards is very strong right now.

The price also broke the previous wave '4' high at 1229.18, which is again another bullish signal.

I have re-labelled the price action with the best fit wave count after todays rise.
The very impulsive looking nature of the rise today fits the personality of a third wave
So I have labelled it wave '3' grey off the trend line low.

The price action fits a rally at two degrees of trend also,
This allows for a further push higher in the early trade next week.
1229 forms the immediate support/resistance with the price resting at that level as I write.
For Monday;
A further rally above the trendline on Monday will strengthen the bullish case.
Any decline form this point must stay above 1214.74 to remain with a bullish stance.

Thats all for this week,
I wish you all a happy and peaceful weekend.
Unless you are weekend reveler,
in that case I wish you a happy and loud weekend!

Enda.