Free Daily Foreign Exchange Market Forecasts... w/ Scott Holley, Senior Currency Strategist
EUR/USD : Here we are Monday morning and the Euro has risen even higher. This is one of the reasons stops can be harmful and can take you out of the game prematurely. Previously, we suspected the top was made and we were wrong. The market proved that this morning but just the same, we still feel we are right, looking at the bigger picture and price should start to fall once again except this time, much lower. RSI divergence is still apparent and price action is still choppy.
EUR/USD : With the recent 3 wave corrective looking upswing, the equal price movement of wave “a” and “c” of larger degree wave “x”, RSI divergence, and the impulsive looking sell off recently, I’ve become more confident that we are probably headed much lower. Since the 50% retracement level was not reached by wave “w” back on Feb 14th, I’m still bearish Euro until that level is taken out. Like everything, only time will tell. Have a great weekend everyone!
(EUR/USD) With the clear three wave structure to the downside and then subsequently moved three waves up, I’m counting the recent price movement as a complex correction which should bring price action back down to the 50% Fibo retracement level at the very least. Also, notice the divergence in RSI. Now would be a great opportunity to short the Euro.
(EUR/USD): The drop in price recently on the daily chart looks to be a three wave affair as the channel from Feb 1-14 has recently been broken. The 50% fibo retracement level has not been reached as of yet so my count calls for further lowering of value before the corrective pattern is fully complete. Short term I’m bearish Euro until at least 1.33662 is reached.
(GBP/USD) The Sterling still looks bearish even though the fall has been a bit more choppy than expected.
(USD/CAD) It still appears that our count is correct so we’re not ready to change it. Price has remained up and we are waiting for new near-term highs to be made to before our confidence rises. Expect prices to move higher.
(AUD/USD) Could the Aussie finally be turning south in a larger way? We will wait and see. Confidence has risen but we are still waiting for new lows to be made.
(USD/JPY) It would seem the pair has found support and should move higher. 7 waves can be counted down when looking at the 4 hour chart. It’s our view that the USD/JPY will make new highs before eventually coming back down for new lows.
(AUD/USD) The Aussie has held up very well against the US Dollar. Our count is still valid as the recent rise has not made a new high. Confidence has lowered as the key 61.8 Fibo level was taken out with ease. We shall wait and see what develops.
(GBP/USD) The drop has been so strong that it has given us a great confidence in our bearish outlook for the Pound. If wave (4) is indeed complete, expect a very large bearish move to the downside in the coming months.
(USD/CAD) The pair seems to have continued it’s uptrend. The recent pull-back counts well as an expanded flat. Price should move higher fairly quickly.
(NZD/USD) The long impulsive move to the upside still continues but leaves us with a very probable count. The recent new high may be a wave iii within a large diagonal wave (v). Remember, ending diagonals are the last moves before reversals. We’ll continue to watch this pair closely.
(USD/JPY) The pair has risen as expected. There should be a small drop in value before the next bullish move.
(USD/JPY) The b wave of the recent corrective pattern should be near complete. Wave c should be starting to unfold very soon which should bring price to levels over 101.46.
(NZD/USD) The large expanded flat looks to have reached it’s top and should start it’s descent shortly. All new lows should be made in the coming month(s).
(EUR/USD) The Euro is a somewhat a mystery. I am leaning toward our alternate count as the original drop, starting on Dec 17th 2008, still counts too well as an impulsive move downward. If the rise from the low in Feb 2009 is indeed an expanded flat, it is possible the Euro has hit a top and will be moving much lower like the rest of the majors.
(AUD/USD) The Aussie seems to have made a clear impulsive wave downward (on the hourly chart) and is tracing out what looks to be a corrective move upward. We’re still waiting for price action to reach the 50 % fibo range before we go short.
(GBP/USD) It would appear that the Sterling has reached a top and will be dropping to much lower levels in the coming weeks. The Aussie and the Kiwi both seem to have traced out similar patterns that confirm pending Dollar strength. The Euro and the Franc are the two currencies that haven’t seemed to trace that same top as of yet to confirm this sentiment further. Time will tell like always.
(USD/JPY) The pair looks to be moving in an A-B-C corrective fashion. Under the count above, wave b should be coming to an end soon and wave c will begin to move prices upward.
(EUR/USD) If count is correct, price will have to move much higher to complete the impulsive wave C pattern, before reversing downward. Price should eventually rise above 1.4720.
(USD/CHF) It’s always a good idea to look at the big picture anytime you feel a bit confused with your count. When looking at the Franc’s weekly price chart, the picture becomes a little clearer. Buyers and sellers look to be duking it out as price action has gotten very choppy. Still, we can count 5 waves down so far but wave a has still not been passed by wave c of “(X)”. We’re still betting on prices dropping lower (below 1.0370) before turning in the other direction. As always, give the market room to move around and manage risk wisely.
(USD/CAD) A bottom should be in place now. Expect price to continue as we believe to be in the beginning stages of an upward A-B-C correction.
(USD/JPY) We were wrong with our original count. As a result, we have changed our count to reflect the evidence given to us by the current price patterns. Like I stated before, this is the reason we as traders risk a very limited amount of our capital. Often a trader can be wrong and the times he/she is, losses should be limited in order to preserve capital for the next opportunity. It’s very rare that any opportunity is a “for sure thing” so me mindful of that. It’s too early to tell but it appears that wave “a” may be over and we will be heading lower in a wave “b” affair.
Here’s an excerpt from the new “Best Practices” section I added today. I’ll be adding new tips here and there to assist and educate. You can click on the section above ^ or just click here. Have a great weekend my friends!
(USD/CAD) It appears the Canadian Dollar has ended it’s rise. Price action should prove upward in the coming weeks. Channel has been broken and the first few bullish moves look like they could be impulsive.
(USD/JPY) Bearish outlook continues… We’re still waiting for the pair to plunge. The fight between the bulls and the bears seems to be making price action a lot choppier which is probably a signal that price is set to break out. The recent small 5 wave move downward does have some overlap so we are not entirely confident that the drop has begun yet. There was a temporary spike through the lower support line of the rising channel as well but price bounced upwards again. This most recent rise can be counted as a three wave move and has remained inside our most recent downward channel. Now would be a good opportunity for those who have not yet sold this pair to do so now as the risk/reward ratio is very good and we somewhat have a 5-3 combo so far. We’ll wait and see as always.
(NZD/USD) A top has yet to be set so we must wait before we alter our view and turn bearish. Kiwi should be losing steam eventually but when that is, we will have to wait until the pattern becomes overwhelmingly obvious.
(USD/JPY) I would like to take a look at the 4-hour chart again of the pair to take a closer look at this morning’s price action. It would appear the support line of the upward channel has been breached. This could just be a spike so time will have to tell the full truth but this could be an indication that a top has been formed and that prices will start to move much lower.
(EUR/USD) Primary count has changed. We have labeled the recent sideways price action as a triangle (wave iv) and it looks to be over. Expect one more impulsive move upward to make a new high above 1.4725 before resuming it’s downward trend.
It’s important as a trader to only take action when you feel in your gut there is a 4 in 5 chance of winning that trade. Most traders lose more than they win because they take the 50/50 or 60/40 trades. All traders know they will lose sometimes but the ones who win at the end of the day, are the ones that minimalize their losses (only trade the high probability trades). If you are unsure if you should take action, walk away and come back to it later on and chances are, the picture has cleared a little. Discipline, Discipline, Discipline… Have a great weekend everyone!
(USD/JPY) Today I chose to change it up a bit since the markets haven’t moved much as Fridays generally experience less volume. I wanted to take a closer look at the price action of the USD/JPY as price has risen quite a bit since the July 13th low. The Elliott Wave Principle can be applied to all timeframes as many of you know and in saying this, we looked at the 4-hour chart to see if we could identify certain patterns or wave counts. As illustrated above, 7 clear waves can be counted upward. Motive waves can be counted as 5,9,13,17,21,25… Corrective waves are counted as 3,7,11,15,19,23… If indeed we are correct in determining that the current pattern is a smaller wave (ii) within a larger wave 3, price should reverse very shortly and make new lows. As always, we have to wait and see what patterns emerge.
(USD/JPY) We remain bearish even though the correction has traveled higher than we originally expected. Price action is hard to count but the “look” of wave i is definitely impulsive and wave ii seems to be corrective (overlapping waves). We are watching this pair very closely and feel the long term downward channel is starting to provide some resistance. As always, we shall wait for further patterns to emerge.
(USD/CAD) The Canadian Dollar looks like it has traced out 5 waves down. Larger trend is down but the next phase should bring weakness to the Loonie. The current wave up should be a wave B correction of an A-B-C downward affair.
(USD/JPY) This looks like the perfect opportunity to short the Dollar against the Yen. Confidence is very high that the slide down has begun and will continue to accelerate. Happy Trading 
(AUD/USD) The Australian Dollar may have reached a top. We’re still looking for more evidence.
(EUR/USD) It’s hard to tell what to make of the price patterns recently. It does look very sideways but we are unsure if the triangle has finished or has stalled. Until new highs are made, we are still on the fence.
(USD/JPY) The wave ii correction of the larger wave (iii) should be completing very shortly. We have counted the recent upward movement as a double zig-zag correction. Expect the Japanese bulls to resume control and push value higher (pattern to move lower), very swiftly.
(GBP/USD) I would like to present this alternate count where we have changed our primary view. Under careful review and counting waves within the shorter time frames, we believe the pound may be moving upward in an ending diagonal. Under this count, price should lower and then move higher. Remember ending diagonals take the form of 3-3-3-3-3. As such, we should be at the end of wave “a” of wave iii of the diagonal. Of course this count may change once again. Confidence has been lowered and may be a good time to sit back, sit on your hands, and wait for the next clearer opportunity.
(GBP/USD) Sideways triangle theme is continued in the pound. Time will tell if the triangle is near completion or will be stuck in the current range longer. What we do expect is price to eventually make a brand new high.
(EUR/USD) After seeing the recent high been taken out we are forced to re examine our counts. Price action is too choppy to see any impulse waves just yet. We are now counting the rise in price from the beginning of March as impulsive which means we are most likely caught in a wave iv sideways triangle.
(USD/CHF) Price action has been very choppy for the Franc but we have still managed to count impulse waves pointing upward. Emotions have hit the extreme and for some, the perfect environment for discounted pricing. As always, we shall keep our eyes on what patterns emerge next.
(AUD/USD) As suggested in a recent post, successful traders manage to do what most other traders do not. They sell at the emotional extreme of a rally and buy at the emotional extreme of a decline. We have reached that point. Will price move higher or lower? Well we are unsure but the evidence is on our side for the bearish scenario. Price action is currently at the top of the illustrated channel and makes for a nice entry point to short the market as if we are wrong, there is limited loss. If we are right, the market will have a very long way to get back to this point which will prove to reduce emotional stress. Remember, yes it is difficult to trade against these emotional extremes as when you see strong moves upwards, the common thought is to be bullish, but it’s always good to stop and think about if that rise is impulsive or corrective. Our money is still on corrective and if we are wrong, we have limited loss. If we are right, the market will have a good amount of profitable space. Always remember …when everyone is bullish, that’s the time to prepare to be bearish and vice versa. Have a great weekend!
(USD/JPY) Next drop should be one of the swiftest, fastest moves as channel has been broken even lower signalling a strong 3rd wave. 3rd waves are usually the “bread and butter” of profit for Elliotticians so brace yourselves and enjoy. Now would be a good time to short the Dollar against the Yen.
This article, written by Robert Prechter, focuses on how to apply the Elliott Wave Principle when trading and some of the common mistakes most traders or forecasters make when trying to time the market correctly. It’s only a portion of the original in Prechter’s Perspective, published 2004, but should prove to be valuable information for most of you. Enjoy!
(USD/CAD) The Canadian dollar’s decline looks fairly impulsive which has caused us to favour the count which labels the recent US Dollar advance as a corrective move. 7 waves can be clearly counted on the daily chart which indicates a correction-wave (iv). Expect price to reach below 1.0772 before moving upward.
(AUD/USD) Price is still bouncing around a little but I am still sticking to my original count as other currency pairs seem to be agreeing with the whole dollar strength argument. We could be wrong but it’s always wise to wait until the paterns show you otherwise before exiting a trade. We should be in the early stages of a wave 3 impulsive move so expect price to move lower swiftly, in the next few days.
(GBP/USD) The Sterling has broken a couple of long term trend lines which indicates a strong case for a reversal in trend. We’ll continue to watch this pair closely. If trend has changed, we are in the very beginning stages of a final impulse wave which will eventually record new lows for the year.
(NZD/USD) The Kiwi has also broken its long term channel. The last move upward was counted as a truncated ending diagonal. The channel break and Elliott count bolster the argument that the Kiwi is about to lose value against the US dollar in the next few weeks/month(s).
(AUD/USD) As shown above, this is the second time a low has been broken. We feel this is a strong indication that the trend has changed. It’s not entirely clear but clear enough for us to confidently say we should be be seeing a swift downward move very shortly.
(USD/JPY) Our alternate count appears to have been correct. What was once our primary count has now become just that once again with almost absolute confidence as the recent lows were all taken out with brute force. Yet again, a beautiful example of how the Elliott Wave Principle can tell the investor when he/she is wrong and allow him/her to quickly take action.
