CadJpy At 78.5!. What next?

In the last updates, we forecast a corrective rally for Cadjpy to 78.5 after a bearish impulse move. We even gave a trade recommendation to buy to 78.5 prior to the Oil producers' meeting in Algiers.

Price rallied to 78.5 and we think a bearish move may re-surface.

The chart above shows that the correction is a zigzag pattern which may complete just beneath the falling trendline.

If price is well resisted  below 78.9 and falls below the rising trendline78.5, we may have a strong reason to short cadJpy for the continued bearish move.

If price pierce the falling trendline powerfully, we may see more upside move.

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The Bulls aren't done with Usdcad.

The bears ushered the Loonie into the beginning of the year in a rather fast typical five non-overlapping waves which we call Impulse wave.

The bearish impulse wave continued till May and ended at 1.2456 and ever since, has been engaging in a time-consuming corrective move upside. We have taken trades at some clear points in the correction and have maintained that the move still remain upside. Price has been validating our point of view along the way.

1.35 is the projected level for the correction to end, of course, this is probable; but believe that we are not doing any guess work.

The corrective pattern seems to be a double zigzag pattern. The 1st leg being a zigzag, 2nd -a triangle and the 3rd is looking like a zigzag as well. What is so interesting is the pattern symmetry is price moves just as we forecast.

The symmetrical part is that the 2nd wave of the 3rd leg of the double zigzag looks like a triangle as well and YES! that's what we want to take advantage of.

I hope you get the point with chart above. A triangle has completed the first 4 legs. If the last leg of the triangle completes as shown above and price shows a sign of further bullish move, we may see a renewed move to 1.35 and THAT we don't want to miss. It will mean that we are trading in the direction of the immediate intra-day trend.

This, surely, is not cast on IRON as price may go in many other ways. BUT we have created our edge and we just need price to approve before we take the next step.

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Eurusd and Eurgbp Opportunities Amidst Reports

WILL EURO STRENGTHEN?

With high impacts reports coming from USD and EUR in some hours time, we will likely see some big moves in Eurusd. So there is a need to watch closely.

ECB President Draghi will speak in Frankfurt during which time the crude oil inventories data will be released in the U.S; all these will happen 30 minutes after Fed Chair Yellen's speech.

We have been looking at a the possibility of Euro rallying to 1.46-47 price region to complete the long term wave 4 triangle as shown in the chart below.

The chart below shows that the last leg of the triangle, if complete, will be a double zigzag. A strong move upside will confirm our stance for a bullish drive.

The chart below shows make up waves of the price action as it may start the journey upside. A 5-wave (which ended at 1.1279) break out of the second leg of the prospective double zigzag we mentioned above and a 3-wave pull back (1.1178) at 61.8% fibo-retracement. A solid move to break out of 1.1279 may see price getting to 1.146.

It will be good to wait for price to confirm this forecast by breaking just as said above. We will post more quick updates at our Telegram Channel.

What if the report weakens the Euro and price breaks below 1.1178?. There may be further corrective move downside and we will be on the sideline and watch.

Meanwhile if Euro weakens, we can take a cue from Eurgbp.

The Weakness of Euro could weaken Eurgbp

 A BREAKOUT IN EURGBP?

 
We have this strong bearish bias on Eurgbp until price breaks above 0.8725. The recent rally is taken as a double zigzag correction and may be the end of wave II).

The weakness of the Euro may cause price to break out of the wave II) supply trendline.

If there is a good breakout, we may wait for a pullback while price continues downward to break below 0.83.

Our Choice

We will buy Eurusd if Euro strengthens OR Sell Eurgbp if Euro weakens at the levels mentioned.

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Gold: We have a bearish bias...UNTIL!

From the long term view, it looks like Gold is in a 'no man's land'. Though the trend is bullish and price may continue the upside move at the end of the side-way movement but price may break below the congestion level and start a real correction- a deep one.

There is a way Elliott wave theory can put the current price action/activity to fit the general market structure.

Let's see if we can use it here to extract some vital information

 The chart above shows that from 1043.3 to 1375.05, price engaged in an impulsive bullish drive which broke out of a longer term diagonal.

After such a drive- 5-wave-, price should, according to Elliott wave theory, correct in a 3-wave drive in the opposite direction.

From 1305, price has gone in a sideway movement instead of a sharp corrective move.

Of course, if price breaks above the congestion and eventually, 1305, the bullish party will have to continue.

Conversely, if the congestion is broken downside, a deep lying correction will be confirmed.

I am expecting the later of these two scenarios- the bearish corrective move. I will be looking for opportunity southward.

Let me give you the following to chew and digest.

 From the chart above, there is a forecast for a zigzag correction with a triangle (b) leg. If this will hold, price will be expected to go southward in a 5-wave drive or sharp zigzag move (to form a double zigzag altogether) to 1240.


In another count below-

There is still the possibility of a Zigzag correction with a flat (b) and an expected zigzag or impulsive (c).

1280 and 1240 are good levels price will be expected to get to if price breaks downwards

Any successful bullish drive that breaks above the triangle (b) in the first corrective scenario may hamper the bears.

In the next update, I will share with you, the intra-day analysis so we can get a clearer picture and a good entry.

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Aussie: Deep correction or A genuine move?

The Aussie kept soaring even higher against our expectation. Our expectation for the continuation of the bearish trend will even take longer time if price breaks above 0.7845 labelled as the long term wave (4) as shown in the weekly chart below. If this happens, we will have to believe that the 4th wave will be deeper than the present level.



With the wave count above, there is an extended wave (3) and the 4th wave at 38.2% retracement of wave (3) (at 0.8370) will be the next resistance to watch out for if price breaks above the 0.7845 wave (4) barrier.

If the statement above will hold, the recent upward move that started in late May should be more of an impulse wave than a corrective.
The chart below shows this move is more corrective than impulsive and wave (4) could have ended at 0.7845 which is a shallow one just like we had in wave 4 of (3).



The corrective pattern above is a very deep double zigzag pattern (slightly above 78.6% retracement of the preceding bearish move).

If price breaks out of the channels downside, we may see a 5-wave impulsive bearish move  to 0.608.
0.7845 is the invalidation price level. A break above it would make this scenario invalid.

At intraday level, the chart below shows a double top chart pattern.



A break below the intra day channels could give a good short term selling opportunity with stop loss above 0.7755.

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