Daily-Elliott-wave-analysis-07-17-17 GBPUSD sets up for final push higher.
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: German ZEW Economic Sentiment. USD: Import Prices m/m.
Good evening everyone.
It has been a flat day across the markets today.
WE cannott take a whole lot from the price action,
But there is an interesting possiblity developing in USDJPY
which may add some clarity to the whole dollar correction story which is underway.
Lets start with EURUSD as usual!
EURUSD pushed further up towards the resistance line today
and the structure has developed impulsively.
I have relabeled the recent rise as a larger wave 'v' pink.
This structure should finish above the resistance line at 1.1489.
The larger wave [v] green shown on the 4hr chart is closing out an extended five wave internal structure.
Wave 'v' pink would complete that wave count.
The overall price structure on the 30 minute chart looks very like a top right now,
Further new highs are weak and upside momentum has died.
For the next couple of days it is again a game of wait and see.
First wave '5' grey must top out over 1.1489 and the price should come back down impulsively off the highs.
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: CPI y/y, BOE Gov Carney Speaks. USD: Import Prices m/m.
The decline off Friday's high at 1.3114 is very like the corrective action expected.
I have labelled wave 'iv' pink as all but complete at the lows of the day.
Initial support lies at 1.3030, the high of the previous wave (a) brown.
The price is 1.3048 as I write,
So wave 'v' pink could begin soon.
Watch for wave 'iv' to complete.
If the price creates a higher low at or above 1.3030.
That will signal wave 'v' pink has begun.
Wave 'iv' should not cross below 1.2953 in this scenario.
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: Import Prices m/m.
USDJPY bounced impulsively off session lows today,
So far the rise off 112.25 is in three waves,
The structure needs to develop further to create five waves up.
The price must not decline below 112.25 again in to save the current bullish stance.
I have labelled the action as a a series of 1,2 waves to the upside.
This wave count calls for a rally in wave '3' pink immediately.
If the price rises above 112.86 tomorrow,
That will signal wave '3' pink is underway.
I want to bring attention to an alternate view on the 4hr chart.
It is also possible that a larger flat correction is developing in wave [ii] grey.
The fact that the current wave has not accelerated higher yet eaves this possibility open.
A drop below 111.77 will trigger this alternate wave count.
The eventual outcome is the same,
But the alternate wave count allows for another drop into 108.80 before turning up again in wave [iii].
Watch for a break of 112.86.
DOW JONES INDUSTRIALS
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: Import Prices m/m.
The DOW drifted off Fridays all time highs today
in what could be the beginning of wave 'c' pink.
A further decline below 21520 will signal that wave 'c' has begun
The 4hr momentum has topped out at an extreme and declined towards the centreline today
This anticipates a decline in price to come.
Wave 'c' pink should trace out a 3 wave decline,
initial targets for wave 'c' lie between 21436 - the 50% retracement level of wave 'b'.
And 21381 - the 61.8% retracement level.
Watch for the decline in wave 'c' to develop further.
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: Import Prices m/m.
GOLD continued higher today and tagged the next resistance level at 1235.
This is another solid indicator that the price has finally bottomed in a significant low.
Both the MACD and the RSI have completed bullish signals by crossing up over the centreline.
This supports the idea of a bottom in place at 1204.
I would like to see wave '3' pink develop further and break immediate resistance at 1235 before completing.
The fibonacci extension of wave '1' pink suggests a high at 1243 for wave '3'.
The next major confirmation resistance level lies at the previous wave 'iv' brown at 1254.63.
And wave 'iii' brown should break that level.
Watch for wave '3' pink to extend above the rising trend channel and complete in the region of 1243.
Price must remain above 1225.76.