NZD/JPY - Triple top triggered

NZD/JPY - Triple top triggered

NZD/JPY triple top triggered 

A major correction has unfolded in this cross since early February 2009. With the break below support at 85.69 a triple top has been triggered and we should see downside pressure mount for a test of support at 81.37 and strong support at 74.42 a break below the later will confirm a long term change in the trend and a new decline to below the ending point of wave A at 44.21.

We are of course talking many month before this low is broken, but I do expect a break below 44.21 for a continuation lower to 36.89.

Short term I'm looking for resistance at 85.69 and at 86.07, which ideally will protect the upside, but even if resistance at 86.07 should be broken it will likely only be able to produce a rally towards 86.55 before the downside pressure will take over again. 

EUR/NZD - Accelerating higher towards 1.6407

EUR/NZD - Accelerating higher towards 1.6407

EUR/NZD accelerating higher towards 1.6407

Since my last post (you can see it here), we saw the expected correction to 1.5717 (just below the expected 1.5736 target) before the correction was over and the next strong rally was ready to take over. We have seen a break above the base-channel, which calls for an acceleration higher towards the next target at 1.6407. However, the 1.6407 target will likely only be a minor stop on the way higher and the next major target will be found at 1.6830, which most likely will mark the top of wave 3.

Short term I expect support at 1.6033 will protect the downside for the rally higher to 1.6203 on the way higher to 1.6407. Even if support at 1.6033 is broken, a new support will be found just below at 1.5980.

Today's Free Elliott Wave Analysis: AUD/CHF - Correcting before lower

AUD/CHF - Correcting before lower

AUD/CHF - Correcting before lower

AUD/CHF correcting before lower

This a cross I normally do not followed, but was asked if I would take a look at it, which I would like to do. At the same time it gives me the chance to show you, how I break down an analysis of a currency cross I normally don't follow.

So here we go.

I always start with a monthly chart, with as much data as possible, which in this case is back to January 1992. The first thing I then try to establish is the long term trend, which is slightly to the downside. The swings inside the slightly falling channel is very extreme as every swing is almost corrected 100%, but not quite.

Now I already know quite a lot about this cross. In theory we could have seen a long term bottom at the October 2008 low at 0.6933, but first of all, we didn't see a break above the channel resistance-line and more importantly we didn't see a break above the November 2007 high at 1.0825, which tells me that the trend is still to the downside.

With that knowledge I want to explore the decline from the August 2012 high at 1.0349 and it is clearly in five wave confirming the trend lower. After a five wave decline I would always look for a correction, which currently is unfolding and with that in mind I will zoom in on a lower time-frame.

Here I have just zoomed in on the weekly time-frame as I already seems to have a good idea, what's going on. Now looking at the weekly chart of AUD/CHF (the lower chart), I first find the Fibonacci corrective targets of the five wave decline from 1.0349 to 0.7723. The first target I will look for is the top of wave 4 of the five wave decline as this would be a very common target for a correction. When the 38.2% corrective target of the decline from 1.0349 to 0.7723 falls at the exact same point 0.8723, it just makes this resistance much stronger, but will it protect the upside?

Well, resistance at 0.8723 will likely be able to produce a move lower towards 0.8346 and possibly even lightly lower to 0.8227, before a new rally higher towards 0.9342 and maybe even higher, taken the wild swings from the past into consideration.

So let's sum up the conclusions, that we can draw from these two charts. We are in a major declining channel. We have seen a five wave decline from 1.0349 to 0.7723 and the current rally of the 0.7723 should regarded as a correction facing strong resistance at 0.8723, which most likely will produce a move lower in wave b to 0.8346 before the next move higher in wave c of the correction towards 0.9342 and maybe even slightly higher, but only time will tell.


Today's Free Elliott Wave Analysis: EUR/CHF - Target between 1.2000 - 1.2033 almost reached

EUR/CHF - Target between 1.2000 - 1.2033 almost reached

EUR/CHF target between 1.2000 - 1.2033 almost reached

The huge ending diagonal, that has been unfolding since mid-May 2013 is almost finished, all we need is the final decline towards the 1.2000 - 1.2033 area to end this ending diagonal and set the stage for a major rally back to 1.2649 over the coming 6 - 8 months.

Short term a break above 1.2116 will confirm that wave e is over and a new impulsive rally is developing.

The only demand we have to this final decline is, that it doesn't break below 1.1953. A break below 1.1953 will make wave c the smallest wave and that is not allowed under the EWP. A break below 1.1953 will force a recount of the decline from 1.2649.

Today's Free Eliiott Wave analysis: USD-Index - Next target at 82.21

USD-Index - Next target at 82.21

USD-Index next target at 82.21

The rally from July 1 low at 79.75 has unfolded perfectly and is currently sitting just below the 82.21 target. At 82.21 red wave iii will be 361.8% the length of red wave i. But how do we know, that the 82.21 target likely will hold for a correction in red wave iv?

Well we don't for sure, that 82.21 will hold and turn the USD-Index lower in red wave iv, but beside the 361.8% extension target, we also saw a nice triangle formation as sub-wave iv of red wave iii and triangles tell us two things. First a triangle tells us, that once the formation is over, the underlying trend will be resumed (in this case higher, which clearly is what we have seen). Second a triangle formation tells us, that the next move in direction of the underlying trend will be the last of that sequence, before a correction takes over. So the rally to 82.21 should be followed by a correction.

Then what can be expected of this red wave iv correction? The first thing we will look for is a correction back to the bottom of wave four of one lessor (in this case blue wave iv, which comes in at 81.26). Then we apply the Fibonacci ratios to the rally from 79.75 to 82.21 and the 38.2% corrective target comes in at exactly 81.26, so now we already have to identical for red wave iv, when we have a cluster of target like this, we should always expect this target not only to work like a magnet, but also provide the necessary support to kick of red wave v higher.

For now we should keep our focus on the 82.21 target, but remember we are close to a short term top for red wave iii and a correction should soon follower in red wave iv.

Today's Free Elliott Wave analysis: EUR/NZD - Target at 1.5920

EUR/NZD - Target at 1.5920

EUR/NZD target at 1.5920

We have a nice five wave rally of the 1.5398 low. The ideal target for wave v of 1 is at 1.5920, we could of course see an extension higher towards 1.5965, but no matter what a minor top should be close by.

The five wave rally tells us, that we should expect only a correction, once wave v finally is in place. After the correction a new impulsive rally should be seen.

As we can count five nice wave up from 1.5398 and have a minor triangle as wave iv, we know that we are in the final move higher of this impulsive rally, before a correction lower to 1.5555 takes over.

Love the good work, most accurate I’ve found in my research. Darryl
Hey EWS,

Great work on the GBPCAD and the NZDCAD. These are the type of opportunities that I am looking for, monthly turns caught with daily or hourly entries. Easy money!!

I have been a fan of you blog for several years!
I am so impressed at your renewal.
Elliott wave analysis is so difficult to me, but so interesting and useful.

Thank you