GBP/JPY Trade Idea

GBP/JPY has broken back up through the strong resistance/support level at around 140 and is looking bullish on the smaller time frames. To the left you can see my daily count and below is a zoomed in 4 hour chart of recent price action. The fourth wave extreme of the move from 150.72 coincides perfectly with the 61.8% Fibonacci of the drop at 143.60. This gives extra weighting to the 143.50/70 zone and I expect that if price retraces back up to that level, it will provide extremely strong resistance and likely be the turning point for the pair. I will be looking to short from 143.50, and keeping my stop at 145.50.

USD/CAD Trade Idea

Here is a 4 Hour Chart of the USD/CAD pair. As you can see price bounced off the 38.2% Fibonacci in what looks to be a consolidatory fourth wave. The EW guideline of alternation fits perfectly with this count, with wave 2 being short and sharp and retracing greater than 61.8% of wave 1, and wave 4 being slower and flatter having only retraced around 38.2% of wave 3.

Below is a 30 minute chart showing a possible count for the correction and the Fibonacci levels where I will be looking to short from. 1.025 is the spot where I will be placing my sell order, and I'll be keeping my stops at 1.031. The more conservative investor may prefer to put their stop at the wave 1 low around 1.038. If price moves beyond this level this count will be invalidated.

GBP/JPY Nearing Daily Resistance

Keep an eye on this one. GBP/JPY has broken a very important support line and is back testing the bottom of it. I expect price will not retrace much above 1.40 if at all and then expect some decent follow through to the downside.

AUD/JPY Trade Idea

While my CAD/JPY count was invalidated by a break above the January high, my AUD/JPY is still very much possible. Here is my 4 hour chart. As you can see a final 5th wave is needed to complete the impulse from 81.72. I expect this final wave will complete at around 85.20, which is where wave 1 is equal to wave 5 (shown below), however if it pushes beyond there it will encounter a significant resistance zone where several major highs have formed in the past. This move is beginning to look tired, as you can see in the chart, the A leg of 2 was much sharper than the C leg has been so far. RSI divergence also warns of impending downside.

Here is a close up hourly of the C leg of green wave 2 so far. As you can see the final 5 does not yet look complete. Expect a push above 85 to complete this move. I will be looking to short from 85.10 with a stop above the recent high at 86.20.

EUR/JPY Hourly

After watching Jamie's video just now I've decided to take a EUR/JPY short position. To the left is an hourly chart of the pair. The risk to reward ratio on this trade is very good, as a stop can be placed at the wave 1 low at 123.22 about 50 pips away from the current price level. The Elliott Channel also corresponds well with the Fibonacci ratios of waves 1 and 5, so my target will be just below 120, at around the same level as the 161.8% Fib of wave 1.

CAD/JPY Update

Here is a 4 Hour Chart of the CAD/JPY pair, which I have been watching closely for some time now. In my opinion there have been very few obvious trades over the past few weeks, as price has been very volatile in some markets (EUR/USD for example) and very sluggish in others. I have adjusted my C wave count slightly as you can see in the chart, to better fit with recent price action. Obviously the ED I was following has not completed yet as we have not yet had a sharp fall to the downside. This adjusted count sits much better with Fib ratios than my previous expanding ED one, with waves 1 and 3 being almost exactly equal in length, and wave 5 expected to be around 61.8% of the size of both of the aforementioned.

Here is a 15 minute close-up of the contracting ending diagonal which I now think is nearing completion. Canada's CPI figures come out in the coming US Session which I think will be the perfect catalyst for a sharp fall from current levels and the beginning of a large wave 3 down for the pair. Following are a few more indicators suggesting this pair is about to fall sharply.

Here is a daily chart of CAD/JPY shown with the ATR (Average True Range). As you can see the ATR has fallen to almost as low as the levels of late 2008, just before the massive surge in the price of the pair. This tells us that increasing volatility is likely in the near future.

Here is an hourly chart of the pair, showing multiple divergences in RSI (Relative Strength Index) where CAD/JPY made a new high but the RSI did not. This is just an example of the divergence we are seeing across the board. There are many more examples of divergence across all time frames, which all point to a nearing top forming in the pair.

Another reason I favour this trade so highly is the incredible Risk to Reward ratio it offers. Stops should be placed just above the double top at 90.60 and the minimum target for this trade is 83.2. I suggest placing a short order at 89.70 or if you're going to be watching the markets when CPI figures are released wait for a spike high over-throw of the ED before taking a short position. Good luck!

CAD/JPY Trade Idea

Here is a CAD/JPY hourly chart showing what appears to be a 5 wave 'C' rally from the low. Recent price action seems to be in a series of 3 waves movements, and in an expanding diagonal formation, which is quite rare. If this count is correct, price cannot exceed 89.95 however conservative traders may wish to place their stops above the yearly high at 90.62. I have drawn in the Fibonacci levels for wave 3 and projected them onto wave 5 for you to see. As wave 1 is longer than wave 3 wave 5 must be shorter as wave 3 can never be the shortest wave.

Here is a 15 minute close up of the expanding ending diagonal. As you can see we are very close to critical levels for the pair. I will be looking to short at 89.75 with a long term hold target well below 82.

USD/JPY 4 Hour Update

Here is a 4 Hour Chart of my USD/JPY count. I think there will likely be one more push higher to complete an Ending Diagonal c of B of the triple 3 correction before a final C leg begins. As I have mentioned in previous postings, expect resistance from the downward sloping trend line off the two recent highs. 91.60 is also the 61.8% Fib of the entire consolidative drop from 93.77.

USD/JPY Facing Strong Resistance at 91.30

The USD/JPY is coming up to a very strong resistance area around 91.30. This area has provided solid resistance in the past (3/2) and is also near the downward sloping trend line drawn off the two highs from 7/1 and 19/2. A double zig-zag  from 88.14 appears to be forming, and C of the second zig-zag will equal A at 91.36. I think a short from this area makes a reasonably safe trade. I will be  looking to short from 91.30 and keeping my stop at 92.2.

GBP/USD Update

Here is an updated GBP/USD chart. I think the pair is forming an Ending Diagonal C wave to complete this correction. I got out of my short from 1.5075 at break even and will look to re-enter higher at around 1.5105.

GBP/USD Hourly Chart

Here is an Hourly of my GBP/USD count. I think the pair completed its corrective phase at 1.5196 and is currently carving out a wave 2 before price drops lower. I think the 61.8% Fibonacci retracement of this move at 1.5075 will be a good place to get short. Keep your stops at 1.52.

CAD/JPY Charts

The CAD/JPY 4 Hour Chart looks almost identical to the AUD/JPY that I posted a few days ago. An impulse up looks to be nearing completion in a C wave. I expect another high before we break sharply lower. RSI is divergent across all time frames, however wave count suggests this move up is not yet complete. As the move from 86.95-88.73 looks to be in 3 waves, there are two scenarios I think are most likely. Below are 15 minute examples of these.

Above is my favoured count. It is possible that CAD/JPY (and likely AUD/JPY also) is forming and Ending Diagonal, in which price will move up and down jaggedly until a top forms, probably around 89.60.

Below is another possibility. Due the the 3 wave nature of the move from 86.95, it is possible that wave 4 is not yet finished, and a 5 wave move down to complete the wave is needed before further upside action occurs. If this is correct, I expect wave 5 to complete just above 89.

USD/JPY 15 Minute Chart

 

Here is a 15 Minute Chart of the USD/JPY pair, showing two very clear impulses up so far with another likely to come to form an impulse of a higher degree. I will be looking to get long at 89.80 with my stop at the wave 1 extreme at 89.25. 91 will be my first target, but if the wave looks likely to extend this will need to be revised.

AUD/JPY 4 Hour Chart

 

There has been a lot of speculation recently on risk aversion returning to the markets with a big fall in commodity currencies against the Yen. However following the NFP release this evening (I am in Australia) there has been a sizable increase in risk appetite. This has led to strength in the AUD/JPY and CAD/JPY (another pair many Elliotticians have been focusing on of late). Above is my 4 hour chart of the AUD/JPY pair. I think there is still more upside to come (similar to the CAD/JPY) before a major reversal. I will be watching for a clear 5 wave move up before I look to get short. 

Below is a close up of the B wave down which several people seem to count as a 5 wave move.

 

EUR/USD Double Zig-zag

 

This is my current view of the EUR/USD pair. I think a double zig-zag is forming, primarily because the price action of the beginning of the wave I have labeled as X does not look impulsive, even on a minute scale, so I think there is another downside corrective move to come, most likely another zig-zag, which should take the pair closer to the 61.8% Fib where I will be looking to buy.

The EUR/USD has bottomed

 

The EUR/USD looks to have bottomed at 1.3435. I was completely expecting another low and tried several times to get short but to no avail. I lost out repeatedly trying to pick a top that never even eventuated. Two things I can learn from this experience:

1. Don't get too attached to any single count. There are always bullish and bearish counts, and it is important to always be aware that either could eventuate.

2. Don't over trade. Making multiple small risky trades in the hope of catching the turn is just stupid. If I'm going to take risks like that I may as well go to the Casino. Boredom is no excuse. 

I am setting myself a limit of 3 trades per day from now on until I learn better trading habits. I am going to set my orders and stop losses and try and walk away. I'm not a scalper nor do I aspire to be one. I am ideally chasing trades that last over several days and net 100-500 pips.

Enough about that anyways, here is my EUR/USD count for now. The range I spoke about last night has broken to the upside, and I expect another wave up before a Fib pullback. I have drawn the Elliott Channel and some levels based on Fibonacci ratios where I think the pair might reach before rebounding. I am not going to try and scalp from here because it is possible that the 5 waves up is already complete. For Jamie Saettele's video with his take on the pair click here.

My trade plan is to wait for a significant pullback, be it from the current high, or after another move up, and to buy at the 61.8% retracement. If my prediction in the above chart is correct I will be looking to buy at 1.3570 with my stop at 1.3440.

Range Bound EUR/USD

 

Trying to work out the direction of the EUR/USD based on EWT has been painful for me recently, so I am going to ignore any more counts until this consolidation is over, and focus on some simple technical analysis. As you can see from the above chart the pair is in sitting in a clearly defined range between 1.345 and 1.368. At present price is nearing the top of the range, and RSI on the hourly is nearing overbought levels. The long term overall trend is down. All these things point to future weakness in the Euro, so I am going to attempt to range trade this pair by shorting at the top of the range, with my stop just above it.

A Different EUR/USD ED Count

 

Here is another possible EUR/USD Ending Diagonal count. For this count to remain valid price should not exceed 1.3690. Price falling beneath 1.36 will be a very bearish indicator in the short term and I will be taking a short position if this occurs, however if price pushes above 1.37 it is likely the ED is complete and we should wait for a pullback to get long against the low at 1.3440. 

USDX Ending Diagonal Update

 

The USDX may still be completing a B leg of its fifth wave. For this count to stay valid however a sharp move upwards will need to occur very soon, probably within the next session. Price will ideally stay above 8015, and because wave 1 is greater than wave 3 by price, wave 5 needs to be shorter, so wave 5 should not push above 8210.

EUR/USD Update

 

I have been examining the wave count in the USDX and current price action doesn't fit with the count I just posted in the EUR/USD. I have reviewed my charts and I now think we may still be in a C leg of the final B wave with the final C down still yet to begin. I am now sitting out until I see a 5 wave move down to complete the 5th wave of the ED from which point I will be getting long.

EUR/USD Hourly Chart ED

 

My EUR/USD count is inversely similar to my USDX Ending Diagonal Count, however the final C of the ED in the E/U is much more clear than the its parallel in the USDX. The recent spike down to 1.3435 has been met with strong resistance and an ending diagonal may be complete. I think it is more likely however that this was just a wave 4 and there will be one more sharp spike down followed by an even quicker reversal to complete the ED. If my count is correct there will likely be a sharp retracement over the coming weeks to the near the origin of the diagonal, around 1.458. Look to get long just below 1.34 or on a push above 1.352.