GbpNzd Wave Analysis

There is no other thing that excites an elliotician more than seeing a wave pattern he can recognize on his chart. Such is what I have concerning Gbpnzd. 

 

If well followed, it will be rewardable.

From the daily chart, the upward move has already completed the first impulsive move ( leading diagonal) and its corrective wave ( running flat). 

 

The corrective running flat has been broken upside for wave 3 to emerge. with the thought that the third wave ( an expected 5-wave structure ) should at least expand to 161.8% extension of wave 1 from 2, this should happen at 1.4600 ( more than 4000 pips away) . 

 

Considering the fact that 1.4600 is a strong support turn resistance level, price getting to this level is possible.

 

 

We can watch price wave action in the lower intra day time frame in order to take trades piecemeal from this prospective trading opportunity.

 

On the 4 hour time frame, the price wave that broke out of the corrective flat pattern is running what looks like a 5-wave impulsive move. 

 

Presently congesting in a typical triangle pattern ( Wave 4 ). If the triangle is broken upside ( a trading opportunity), wave 5 will emerge before we see a large correction   ( a trading opportunity) . 

 

 

 

We will also trade the end of the correction if a recognized corrective pattern is formed to ride the trade up. 

 

There are potential opportunities for massive trades and the ability to follow through with patience and discipline will go a long way in the successful execution of these opportunities.

These are just forecasts, possibilities. Price will give us better information because it's the captain of the army ; the rudder of the ship.

 

We check what price presents with what we have and make necessary adjustments and decision. 

 

I will be here for updates.

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Gbpusd: The Power of the Diagonals

How do you see an ending diagonal in a lower time frame confirming the termination of another ending diagonal in a higher time frame confirming the termination of a zigzag correction in a much higher time frame?

 

When this happens, one should expect a spike movement in the other direction . This is what happened on 26th Febraury 0n Gbpusd. Wow! it was sweet!.

 

I shared it here, you scrolled down the blog, its not far. 

 

I Had two trade plans, one was aggressive ( break of 15 minutes ending diagonal) and the other was conservative ( break of the 1 hour ending diagonal).

 

The aggressive was triggered and 60% of it was closed at a profit of 100pips risking just 45pips.

 

For the conservative plan, I will wait till the 1 hour diagonal is broken downside and retraced to form a swing close to its break point and ride down in an expected massive move.

 

As more price gets on the way, market structure becomes clear. Until a reliable pattern is completed, no trade.

 

Trade with discipline

More updates coming

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Usdcad Resultant Triangle.....Another Trading Opportunity!

Wow!....Usdcad has continued its business from where it stopped in 2014 ---Spinning Pips for me! 

 

The last post I did here was about how I took 180pips of the 60% of my exposed lot (The other 40% stopped out at 100pips. 

 

Not bad for a trade of 85pips risk) ,while I watched out for the neckline of an emerging double top whose breakout is expected to be part of the long term bearish movement forecast.

 

I always noted something: as more price data are added, price tend to show us clearly what next is expected and we can follow through with substantial evidence until we have none.

 

The bearish expectation spurned out from the analysis I did on the weekly chart where I spotted an end of a flat correction with reversal candlestick analysis. 

 

You can read the analysis here.

 

With the current intra day price data, what we are having presently is a corrective pattern- A corrective triangle to be precise. 

 

If price breaks this triangle to the upside we could see a real bullish movement ..Did I say bullish..yes! I have a bullish intra day thought against the bearish forecast because that is what price is saying to me at the moment.

 

 Besides if the triangle breaks up and reach 1.3( the next resistance) and its neighborhood, the flat correction is still intact and I can continue from there as price directs.

 

 

I will wait and see how price validates or invalidates this triangle and the alternatives it presents

 

I will be here to update you

Watch For Double Top Neckline on Usdcad

In the last post on usdcad where I forecast a bearish move. Read the analysis here.   I put a sell order and since I have been raking about 180pips risking just 85pips.

 

I closed about 60% of my trade and will allow the rest to run as i watch price action along the way. I might also add to my position if I see a good bearish continuation wave set up.

 

Presently market is moving well and more bearish move is expected especially if the srong intra day support indicated below is bridged.

 

 

I also spotted a reversal double top formation which if completed could add more reasons to why I chose to sell Usdcad

 

Watch out as price play the game and we follow

Gbpusd Intraday Market Update

I will be building on the analysis I did on 22nd of this month. You can scroll down the blog or click here. 

 

I noted an ending diagonal as part of the zigzag pattern that I thought could end wave 4 of the larger wave in order to be part of the potential large move downside.

 

I put a sell order at the break of the diagonal and soon market started moving up and down showing the diagonal might not have finished forming. A diagonal is usually followed by sharp moves

 

I exited the trade manually with -70pips in order to analyse more critically.

 

At the end of trade on 25th February, I saw that ending diagonal was still intact with double zigzags in between its legs. 

 

 

The fibonacci extension of wave A from B has pierced the 161.8% and price is now heading to 200% fibo extension level at 1.5560 and its neighborhood. 

 

This level could mark the last wave to complete the diagonal before a crash down.      A crash down could happen if the 200% level holds and price breaks below the support trendline of the diagonal.

 

Zooming down to the 15minute chart, something very interesting also surfaced.

 

  

    The supposed last wave of the expected diagonal formation, vividly seen on 15 minute chart is also forming a diagonal. 

 

This would be a massive move. That will be dual time diagonal formation.

If the 200% holds at the turning point, i would trade aggressively at the break of the 15 minute ending diagonal. 

 

A conservative way of trading is by waiting for the 1 hour diagonal to be broken downside by price. Proper stop order should be done with good money management.

I will see you in the next update.

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Usdcad Intraday Update

In my last post on this currency pair, I forecast a fall in price at the break of the most recent intraday corrective pattern. I waited till I was sure about the corrective pattern.

The last intraday corrective pattern ended as a zigzag correction completed with an ending diagonal. I sold at the break of the channel at 1.2550 and it looked as if I made the right decision.

I expect price to moce down to break 1.2350 intra day support. The next business now is to manage this trade as more move downward is expected in a 5-wave impulsive move.

 

As more intraday price data are added, we can see more clearly where the next big move will be, and follow through. I will be here to update you.

Intraday Ending Diagonal On GbpUsd

If there is a pattern I enjoy watching out for, it is the ending diagonal or what many chart pattern trader call Wedge formation. 

 

This pattern , apart from its ease to spot and reliability, it also gives an excellent risk reward ratio especially when it ends a correction like what we are having presently in the 1 hour chart of Gbpusd.

 

Since August 2014, the cable has been undergoing a very sloppy run of bearish movement.

 

Going by the daily chart, price could presently have completed wave 3.

 

 Due to the fact that wave 3 is expected to be a 161.8% fibo extension of wave 1, presently price is at 138.2% extension. 

 

 

This shows that there could still be some room downside to complete what would probably be the last wave of the third wave before we have the last correction of the bearish impulsive move. 

 

The price wave formation on the 1 hour chart strongly supports this count with a corrective zigzag formation ending with a clear ending diagonal.

 

 

price should take a dive to 1.4680 ( 161.8% extension of primary wave 1 and 127% extension of subsidiary wave 1)

 

I expect to sell from here as negative divergence formed on the daily chart further gives more confidence.

 

However the price moves, I will update you.

 

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Usdcad Intra day Update

 After some weeks waiting for the dip in the price of this pair, it now looks as if the odds will favour bearish correction (going by the recent intra day wave structure and weekly candlestick analysis) as I showed in the last update (READ HERE)

After seeing the bearish formation of the last three candlesticks on the weekly chart, I decided to wait for the intraday wave structure before I put a sell order.

In the last post on Usdcad, I also indicated how price was almost completing a complex channel corrective structure. 

Price broke out of the channel without fulfilling the fifth leg to complete the correction and then retraced to the channel afterward.

Price is presently, probably, preparing for a new 5-wave impulsive move downward. 

Wave 1 and 2 have been completed already and the breakout of the wave 2 of 3 channel could make a good trade …riding the wave 3 of 3 to wave 5 would be so much fun with exciting risk reward ratio.

 

As more price data are added, it’s important to re-access the position of price in the long term and intraday wave structure. Price is the major determinant of its moves.

I will only put a sell order if price holds below wave 2 (in black) and breaks below the corrective channel of wave 2 of 3. 

That will give an opportunity to ride to 1.19-1.20 region.

See you in the next update and trade with patience

 

 

 

3 Ways to Identify Support and Resistance - 5 Chart Examples

3 Ways to Identify Support and Resistance - 5 Chart Examples

By Elliott Wave International

Today's lesson considers three ways to identify price support and resistance in the markets you trade.

1. Previous highs and lows
2. Trendline support
3. Fibonacci Ratios

These examples are adapted from Jeffrey Kennedy's Trader's Classroom service.

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1) Uptrends terminate at resistance while downtrends terminate at support. Previous highs and lows often act as resistance and support.

In ALCOA Inc (AA), the September 2012 selloff found support near the previous July 2012 low.

The February 2013 peak occurred following a test of resistance at the January peak at $9.33.

2) Trendlines offer resistance and support for prices.

The 2008 advance in Gold found support numerous times near the trendline that connected the lows of the move, as you can see below:

Conversely, the trendline connecting the highs of Wheat's 2012-2013 decline provided resistance for countertrend price action.

3) Fibonacci ratios also identify resistance and support. As Elliotticians, we often look at retracements, the most common being .382, .500 and .618. In Akamai Tech, Fibonacci support ignited the July and November 2012 rallies:

In the same chart you can also notice how Fibonacci resistance in AKAM halted the July 2012 and February advances.

For more free trading lessons on trendlines, download Jeffrey Kennedy's free 14-page eBook, Trading the Line -- 5 Ways You Can Use Trendlines to Improve Your Trading Decisions. It explains the power of simple trendlines, how to draw them, and how to determine when the trend has actually changed. Download your free eBook.

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VIDEO : Want a Sure-Fire Forex Trade Setup? Look for a Triangle

(Video) Want a Sure-Fire Forex Trade Setup? Look for a Triangle
Watch this quick educational video from an Elliott wave forex expert, Jim Martens

By Elliott Wave International

Last fall, the editor of Elliott Wave International's Currency Pro Service, Jim Martens, observed a beautiful pattern in the chart of the Japanese yen. This pattern, called a triangle in Elliott wave terms, offers a very clear outlook for the market.

What is a triangle? It's a corrective pattern, meaning that it moves in the direction opposite the primary trend. And, it's very easy to spot on a chart. Here's an idealized diagram of a triangle.

When a triangle ends, the old trend should resume. This allowed Jim to make a very clear forecast for the dollar/yen. Watch this 7-minute video to see the triangle he observed, and the outcome.

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Free 14-page eBook: Trading Forex: How the Elliott Wave Principle Can Boost Your Forex Success Elliott Wave International's Senior Currency Strategist Jim Martens pulls from 25+ years of experience using Elliott wave analysis to show how you can put the power of the Wave Principle to work in your forex trading. Download your free 14-page eBook now >>

This article was syndicated by Elliott Wave International and was originally published under the headline (Video) Want a Sure-Fire Forex Trade Setup? Look for a Triangle. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

Flat Formation In Usdcad

 

If there is a market that is affected by the international oil price , it is the usdcad. The current fall in oil price propelled Usdcad to a very high level, one that many people might not have seen.

 

From the economic point of view, united stated as the largest oil consumer in the world could afford to buy more than triple of oil with the same price. 

 

This has helped saved so much money and USD (United State dollar) has gained very significantly. Little wonder it strengthened over almost all major currencies.

 

Also, the greatest strength of the USD was clearly seen against the CAD (Canadian dollar) as the later weakened even on its own.

 

Canada are not only US’s closest neighbor, but the largest supplier of oil to the US economy and this business relationship is fostered greatly by the price of oil. 

 

When Oil rises in value, Canada laughs while the US frowns .When it dips in value, the reverse is the case.

This singular act has brought about a negative correlation model between the Oil market and the UsdCad market and that’s why in the last 6-7 months while Oil price dipped, the Usdcad was soaring and breaking more resistive levels.

 

At the beginning of this year, I posted an article on this blog about my view on the movement of Usdcad from the technical point of view. 

 

You can read here 

 

I forecast a probable reversal at 1.1890-1.1920  but the strength of the Usdcad was so powerful that this important resistive region was broken with ease and price now sits comfortably above 1.2500.

 

I will continue from that analysis

 

On the weekly chart, what we are currently having is a flat corrective pattern which is completing at a strong resistance. 

The 5^th wave of the C leg ( an impulsive 5-wave move) is formed at 1.618 projection of the 1^st  wave from the 4^th wave. The flat pattern is also resting at a 50% retracement of the super wave {1}. 

 

If this analysis holds, we should expect a big dip in the price of Usdcad from wave {2}and probably Oil price will rise in the first half of this year.

 

 

A bearish candles formation and momentum divergence at a strong resistance on the weekly chart are early signs of bullish weakness

 

From the intraday point of view, price has started showing some bearish commitment, in a correcting channel after forming an impulsive 1^st wave. 

 

If the channel is broken downward, we should expect price at 1.1500 and below.

 

 If the channel is broken upside and price eventually breaks 1.2800, we could see more bullish move. The intraday channel thereby becomes the action zone. 

 

 

Patience is needed as we decipher what could be the next big move!….Don’t miss it.

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