All Eyes On GbpChf

In the last update on Gbpchf, (read) we were expecting price to rally in 3-wave to complete an ending diagonal which is meant to be the wave C of a larger degree flat corrective pattern.

It was maintained that

If price is contained below 1.5600 and breaks below the trendline connecting wave 2 and 4 of the diagonal, there will be an opportunity to put a long term sell order to ride to 1.38 and below.

 With a probable completion of the pattern, there is a high likelihood of a long term bearish move especially if price is maintained below 1.56.

A conservative long term trader can look for a bearish opportunity as price breaks below 1.4800 ( i.e the wave2-4 trendline)

An aggressive short term trader may enter earlier at the break of  1.5350 to ride to 1.4950 and below 1.4800.


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Will GbJpy crash again?.....And when?

The ending diagonal is one of the elliot wave patterns that I so delight in.
It shows a large reversal in the prevailing trend or counter-trend. The joy of watching price breaking the lower trendline (in a bullish market) and the upper trendline (in a bearish market) is characteristically fast and overwhelming.

On 13th august, I posted an analysis on GbpJpy where the fall in mid-august and early september were so pronounced. The analysis is titled GbpJpy: When will the bears take over? . It's a must read.

Just as the forecast was done, price fulfilled all the conditions and fell sharply.

After the fall, I tried to wonder what drives the diagonals. I posted the analysis titled : What drive the diagonals? on 23rd august. You may want to read it also.

The chart below shows the price movement after the diagonal price formation.

The chart above shows that price is moving in a 3-wave corrective pattern after the motive wave that broke the diagonal downside. There could still be more room for the bears to ride the price.

The yellow region 188.80 and 190 (a confluence zone) is projected for price to complete the correction.

We could see price at this zone after which a crash will be expected.
Price is expected to be contained below 190 for any chance for the bears in the nearest time.

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AudNzd: A Technical Combination!

In the last update on Audnzd I used different technical analysis, headed by the elliot wave theory, to forecast a probable upward move.

There was a condition for a bullish opportunity.

Price could trace down a bit before rallying to break the upper trendline upside. This will be a trading opportunity to buy this pair with a good risk/reward ratio.

There could be a trading opportunity to ride wave C to 1.2175

Gbpchf: The Long Term View

From the monthly chart below, it can be seen that Gbpchf has declined in 3-waves from 2.7328 to 1.13825 in a move that lasted for more than a decade.
The move is expected to be an impulse wave.

The rally from 1.13825 (2011 low) is expected to be the 4th wave of the impulse. Price has tried many times to break above 1.5600, which has now become a strong resistance.

The 4th wave which began at 1.13825 (2011 low) is getting set to complete a flat corrective pattern.

Flat patterns, according to elliot wave theory, are 3,3,5 patterns; the first wave wave is corrective (3-wave), the second wave is also corrective (3-wave) while the terminating wave (5-wave) is a motive wave (impulse wave or ending diagonal).

The weekly chart below shows the internal/building waves of this 4th wave.

The terminal wave of the flat correction is completing an ending diagonal. The 5th wave of the diagonal will be expected to be a 3-wave as indicated in the chart below.

If price is contained below 1.5600 and breaks below the trendline connecting wave 2 and 4 of the diagonal, there will be an opportunity to put a long term sell order to ride to 1.38 and below.