Japanese Intervention

Japan's Strategy Minister Kan has just confirmed that the Japanese Government has agreed to measures to stop the Yen's rise. This may mark the end of the falling USD/JPY for now.

Shorting the AUD/USD @ 0.9180

The trend line from yesterdays chart is being re-tested and the 61.8% Fibonacci has been hit. I'm taking a short position from here at 0.9180. The RBA Interest Rate decision is coming tomorrow and I expect more downside follow through after the announcement. Keep stops above recent high at 0.9325.

AUD/USD Hourly Chart

Here is my favoured count for the AUD/USD pair. The sharp drop from 0.9325 looks more impulsive than corrective, which is why I believe that red wave 3 down has begun. An important trend line support has been broken and I expect a retest before further downside. I have drawn in the Fibonacci ratios to show where black wave 1 down may finish, this is in no way conclusive however as wave 1 may extend. I will be looking to get short when the trend line is being retested, most likely at the 61.8% Fibonacci of black wave 1 down.

NZD/USD 4 Hour Bearish Counts

Here are several NZD/USD bearish counts. In the above chart a flat is playing out. If this count is correct price action will not exceed the previous top at 0.7635, but may come close forming a double top.

In my second chart above the corrective phase (wave 2) is already complete. If this chart is correct than price will soon fall off sharply in a wave 3 down. This is my favoured count and coincides with my AUD/USD chart which I will post up shortly.

USD/JPY Daily Chart

Here is a zoomed out daily chart of the USD/JPY currency pair. As you can see the recent bearish price action does not at all look impulsive. This means that there is likely to be a push upwards over the coming weeks, most likely to at least 101.00. Daily studies are currently oversold, however this does not mean there will not be some further initial downside, so place stops accordingly.

Here is a zoomed in shot of the above cross section. As you can see the support line at 87.20 was easily and decisively broken. This reflects a weakness in the USD and is a reason to be cautious if purchasing any long positions in this pair.

USD/JPY 4 Hourly

My original leading diagonal count for the USD/JPY pair is no longer a possibility as price has broken through support at 88.011. Here is a new count of what may now be happening with the pair. There is a strong support line at around 87.12 drawn from the lows of December 2008 and January 2009. I do not expect this support to be broken easily. I will be setting a limit order to buy a small position in this pair at 87.20, with a stop at 86.00, just beneath the 138.2% Fibonacci of the A leg of the flat.

New USD/JPY Count

Here is an updated count for the USD/JPY pair. Recent price action has invalidated my triangle count, but I am still confident of more USD strength against the Yen in the near future.

USD/JPY Hourly Chart Update

Here is an update of the triangle I think the USD/JPY is forming. So far Fibonacci ratios have been perfect with wave C being 61.8% of wave A and wave D being 61.8% of wave B by price. Wave E looks like it will complete over the next few sessions and then I expect a sharp move north.

Other EUR/USD Possible Scenarios

Here are some more possible scenarios for the EUR/USD pair.

The above chart shows a regular flat forming with an unorthodox wave C being only 61.8% of wave A. This is not an uncommon occurrence in FX markets and fits in with the rising trend line support holding.

The above chart shows a possible triangle scenario unfolding. Once again the rising trend line support will play an important role in keeping price action up. Both of these scenarios are possibilities, although I favour the scenario from my previous charts (see below) where wave C slices through the support line and drops to the 1.45 area.

USD/JPY Daily Chart

Just a quick note on UJ, notice how the pair hasn't been able to close beneath the 61.8% Fibonacci Level even after several attempts? I am very bullish on is pair and anticipate a strong upward move at some point over the next week. 

EUR/USD 15 Minute Chart

Here is a close up of what I think is going on for you Johnny. It is possible that a triangle is forming due the the 3 waves up and 3 waves down we have had so far, however I am more inclined to believe that a regular flat is forming due the the very small difference in price between the two recent highs. Either of these option point to some Euro weakness over the short term, and as I said in the comments box I have taken a small short position at 1.501 with a stop just above the recent high.

EUR/USD 4 Hour Chart

Here is a 4 Hour of the possible flat that I have spoken of previously. Is this what you were talking about Murray?

EUR/USD Double Top

Looks like the Euro couldn't make it through resistance and has begun a sharp drop away from a double top. Sharp and Fast price movement has me convinced that this will be the highest the Euro goes for the next few days at a minimum. Divergence on the RSI also points to further downside over the near term. Trend line support has just been broken as well! Now is a good time to short with a stop just about 1.5065. Good luck!

EUR/USD Flat

Here is an hourly chart of the EUR/USD currency pair. The AUD/USD reached a new high over the last session and I expect the EUR/USD to be not too far behind. A flat may be unfolding which means there the is still at least another impulse up to go for the Euro against the Greenback in the next few weeks after a C leg down. I have zoomed in on the marked section in the next chart to show you more detail. Divergence in RSI also favours the bears.

The 15 minute chart above shows the recent price action in the pair. As you can see waves 1 and 3 are almost exactly the same size. This means wave 5 is likely to extend. This would coincide well with a throw over which is common for ending diagonals. I think price will likely spike to 1.5130 after a break through the recent high at 1.5063 before a sharp pullback starting wave C down. Alternatively it is possible that wave 5 will only be 61.8% of wave 1 and not be able to break through resistance. Pulling back just beneath the recent high.

Bias Change?

If the US Dollar index drops to a new low and the EUR/USD and AUD/USD push through to new highs my dollar bias in the short term will change. It can be an expensive exercise  sticking to an incorrect bias and stubbornly refusing to believe that your original analysis was incorrect. We can't win every time.
Overbought readings have dropped back due the the consolidation of the past 10 or so days so a new high is a possibility. The proximity to recent highs/lows in the aforementioned indicies mean that breakouts are a distinct possibility. I hope the tops are in but right now I am not so sure anymore..

USD/JPY 4 Hour Triangle

I have been watching UJ very closely for the past few weeks. Here is another possible count for the  pair. Triangles are very rarely seen as in wave 2's so if this count is correct it is likely that a B wave is nearing completion. The 61.8% Fibonacci has held as support so far with no 4 hour candle able to close beneath it. I am bullish on this pair as long as price is above 89.50. If you have an opinion or question on this I would be very interested to hear what you have to say, please comment and I will get back to you with my thoughts.

EUR/USD Daily Chart

I am posting this chart in relation to a comment from my previous EUR/USD post. Although I will remain bullish USD until previous highs are taken out, the EUR/USD has not broken through the long term channel so more upside is definitely a possibility. For another EUR/USD daily chart from Jamie Saettele of DailyFX, an Elliottician I have a lot of respect for click here.

GBP/USD

The Pound is presently coming up against significant resistance against both the USD at 1.6745 and the Euro at 0.892.

Trade Idea of the Day

Short AUD/USD at 0.9290

Stop Loss: 0.9330

Target: < 0.8900

AUD/USD Hourly Chart

Here is a possible count on the AUD/USD. I remain bullish on the USD and do not expect the Aussie (or any other currency for that matter) to make a new high against the USD. For the latest COT data from DailyFX click here. I think there will be considerable resistance at around 0.93 and think a short at around that area with a stop just about the recent high at 0.9329 is a small risk to take for considerable possible gains.

USD/JPY Hourly Chart Update

Here is my count for UJ. I think it is highly likely that the pair will reverse at around 89.6. At this level waves A and C are equal and waves 1 and 5 of C are equal, with wave 3 being extended (>161.8% of wave 1) so it is unlikely wave 5 will extend. As I am bullish on the pair over the medium term, I believe a good strategy with an excellent risk/reward would be to take a long position in the pair at 89.6 with a stop loss just below recent lows at 89.18.

EUR/USD Hourly Update

Here is my updated Euro count. Over Friday's last session the pair was looking weaker than Cable and all of the commodity currencies. It is unlikely the pair will retest the 61.8% Fibonacci at 1.492. I will be looking to go short with a stop loss just above 1.5065 when the Asian session begins on Monday.

SPX 500 Updated

I think the SPX500 is going to reverse where wave C = 61.8% of wave A at around 1076, just beyond the 61.8% Fibonacci retracement of the whole drop.

SPX 500 Hourly Chart Update

Here is an update of my SPX chart from yesterday with the most correct trend line left drawn in. Looks to be a pretty accurate representation of what is going on so far. Looking for a spate of weakness over the next session, which will hopefully coincide with my expected downside on the GBP/USD and EUR/USD.

EUR/USD Hourly Chart

Looking good for US Dollar bulls. The Euro had bounced off the 61.8% Fibonacci and looks to have completed and A-B-C irregular flat correction. Now would be a good time to short with a stop loss above the recent highs at 1.5065. 3rd waves are normally the fastest and the strongest waves, so expect a sharp drop once 1.4620 is broken. 

USD/JPY Hourly Chart

Although I am bullish on this pair, there may still be some short term weakness to come before further upside. This is not my favoured count however, I am hoping that the 5-3-5 move I have marked as a-b-X, is actually a 1,2,1, with another 2 complete or almost complete and a sharp upwards movement to soon follow.

SPX 500 Hourly Chart

Here are a few possible scenarios for the SPX. Normally a wave 2 retraces around 61.8% of a wave 1, and so far the retracement has been quite shallow, so it is possible that another A-B-C is coming. The SPX does have a high correlation to the EUR/USD however, and I do now expect too much more upside from the Euro before furhter downside, so the scenario in which the correction is complete is my favoured one.

Trade Idea of the Day (Update)

Looks like the impulse down was not complete and has extended further. I have updated the chart to show what I think is going on now. Still waiting for a Fibonacci pullback to short the pair.

I think the GBP is due for a spate of weakness. This coincides with my current trade long in the EUR/GBP. Cable has been confined to a clearly defined range, and is at present very close to the top of it. A short from near here offers a good risk/reward ratio.

Short GBP/USD at 1.655

Stop Loss: 1.664
Target: 1.630

Edited 6.20 P.M. GMT + 10 Hours

New Possible NZD/USD Counts

Here are 2 new possible Kiwi counts. The retracement so far has been unusually shallow so it would not surprise me if the NZD were to bounce higher again in a double 3 complex correction. It is also possible that the consolidation is over and price is about to drop off rapidly. NZD weakness could have something to do with the unexpected increase in the New Zealand unemployment rate that was just announced: Click here to read more. Yesterday's Trade of the Day initiation price was not hit, and the count we were working off is no longer valid, and so we will no longer be looking to take that position.

GBP/USD Hourly Chart

Cable looks to be trading within a well defined range. Look to sell near the top and buy near the bottom.

EUR/GBP Hourly Chart Update

Here is my updates chart of the EUR/GBP pair. Luckily the B wave stopped just before hitting my stop loss point at 0.8912. It looks like a further 5 wave rally up from here is likely. A good time to buy would be after a wave 2 retracement with a stop loss just below the double bottom.

Trade Idea of The Day

Long NZD/USD at 71.50
Stop Loss: 70.85
Target: 74.00

To be canceled if not initiated by 11 P.M. GMT + 10 Hours

NZD/USD Hourly Chart Update

Here are 2 examples of what is possibly in the making with the Kiwi. Either way I expect some USD weakness over the next session.

EUR/USD Hourly Chart Update

Looks like my skepticism of the USD bull move was well founded, and over the last session the US Dollar Index pulled back swiftly from its recent high. I've reviewed my charts and the 3 wave move that just didn't seem to fit in with anything can actually be taken as an ending diagonal. In the chart above I have labeled what I now think is going on in the pair. This fits in well with my AUD/USD and NZD/USD counts from yesterday which I still believe to be correct.

USD/CAD Hourly Chart

The Loonie has broken through a serious support line. Could be a good short on a pullback to retest the trend line, however I am not confident in a large pullback in the USDX so this may be a false break.

GBP/USD Hourly Chart

Here is a chart showing a very important support/resistance line drawn from the lows from the 8th of July and the 1st of September. It has been important for the GBP/USD pair on many occasions and I expect that when price breaks through it, it will be swift. The line is currently sitting at around 1.626.

EUR/USD Hourly Chart

While I am still somewhat sceptical that the next move down has begun, I can't ignore the facts. The sharp fall that just occurred in the Euro doesn't seem to fit with any other consolidation pattern that I can think of. I have marked the extremely obvious 3 wave move up, which cannot be the C leg of a move and also ruins any irregular flat scenario that I can think of. Another reason why I am not sure about this move is because of how shallow the retracement has been, however this could be a sign of a very week Euro. This could be a good shorting opportunity. Keep risk just above 1.48.

Invalidated Counts

Recent Triangle Counts for the USD/CHF, EUR/USD, and US Dollar Index have all been invalidated. I will post new charts tomorrow when the count becomes more clear. The Euro and Swissy have lost a lot against the USD however the Pound and the commodity currencies seem to be holding up against the USD strength.

Trade Idea of the Day

Long EUR/GBP from 0.8990
Stop Loss: 0.8912
Target: 0.9150

AUD/USD Hourly Chart

The RBA just announced that they are raising rates by 25 BPS to 3.5% as expected. The last line of their statement:

"The adjustments at the October and November meetings will work to increase the sustainability of growth in economic activity and keep inflation consistent with the target over the years ahead."

This suggests they will likely leave interest rates at this level for a while. While the Aussie sold off sharply on the news, there was a lot of volatility and indecision in the market. This leads me to believe that there will be another short term push upwards before the next sharp drop in price.

EUR/USD Hourly Chart

The 3 wave moves appear as though they are part of a triangle, however there are competing counts on which way it might break. Here is a possible option.

NZD/USD Hourly Chart Update

Kiwi Update. I expect the commodity currencies to be strong during the next session.

USD/CHF Possible Triangle Correction

Here is a triangle count for the USD/CHF pair. The EUR/USD could also be playing out a similar pattern.

US Dollar Index Hourly Chart Update

Here are the 2 scenarios I believe are most likely for the USDX.

There is a distinct 5 wave (impulsive) move up as shown in the charts. That implies that the move is most likely either the beginning of the next leg up, or a C leg of a corrective pattern. My charts for the USD/CHF pair are almost identical to these also. There is also the chance that these pairs are forming a triangle (see today's USD/CHF post).

USD/JPY 4 Hour Chart Possible Inverted Head & Shoulders

US Dollar Index Hourly Chart Update

This is my current count on the USDX. Although there are several possible counts at the moment, this is what I speculate is underway. I expect a retracement to at least the 7580 level before further upside. I am fairly confident that the wave 1 impulse I have marked is correct. Robert Balan states: "The normal retracement of an irregular correction is 38.2 percent from the orthodox end of the adjacent impulse wave," and wave C of the irregular flat finishes almost exactly on the 38.2% Fibonacci of the entire first impulse.

EUR/USD Hourly Chart

 I think the EUR/USD is forming a flat correction and price will soon bounce higher off the 1.47 support area.

USD/CAD Hourly Chart

The USD/CAD pair seems to be trading within a well defined channel. Any break below this channel should signify a good shorting opportunity.

Trade Idea of the Day

Long USD/JPY from Current Level (89.75 at the time of posting)
Stop Loss: 88.00
Target: > 93.50 (Where wave A/1 = Wave C/3)

USD/JPY Hourly Chart

The USD/JPY pair looks to be playing out exactly as I predicted last week. As is common with leading diagonals, wave 2 retraced around 70% of wave 1. I am currently holding a long position in this pair.

NZD/USD Hourly Chart

The Kiwi looks to have touched on and bounced perfectly off the 138.2% Fibonacci level, which, according to Robert Balan, is extremely common in irregular corrections. 

SPX500 Hourly Chart

I have reviewed my SPX charts and am no longer expecting the wave 2 up to occur so soon. This is what I predict will happen over the next few sessions.