Elliott wave analysis of EUR/JPY and EUR/NZD

EUR/JPY

 

 

It is still an open question whether a flat correction or a triangle is developing. Just looking at the chart the triangle possibility looks more convincing, but it would not take much to alter that outlook back towards the flat concept. So what do we do? We will hang on to the flat correction concept for now, but protecting will be tight. A failure to break below 114.10 followed by a break above 115.22 and more importantly a break above 115.55 will confirm the triangle, while a break below 114.10 and more importantly a break below 113.65 will confirm the flat correction for a decline down to at least 113.24 for before this correction is over and a new rally above 116.00 will be seen. 

 

 

EUR/NZD

 

 

Trying to pick the bottom of this correction, has been a very difficult task, even though we had a clear loss of downside momentum. Yesterday we saw a spike down to 1.5583, but the following rally does look impulsive, and all we need now is a break above 1.5751 as the first good indication that a important low is in place. However, more importantly we need a break above 1.5841 to confirm the low for a new rally higher towards 1.5975 and 1.6218. Short term I expect minor resistance at 1.5751 will protect the upside for a minor set-back towards 1.5632 before the next move higher through 1.5751 for a test of the important resistance at 1.5841. Only a break below 1.5583 will confuse the picture, but any downside below 1.5583 should be very limited.

Elliott wave analysis of EUR/JPY and EUR/NZD

 

EUR/JPY

 

 

With a rise all the way back to 115.55 this rally corrected more than 80% of the decline from 115.96 to 113.65. That means we are likely looking at a flat correction or a triangle correction. If it is a flat correction we should see a clear five wave decline to below 113.65 to end this correction. If however, this is a triangle we should not break below 113.65 before the next minor corrective rally. At this point it's still impossible to say, which of the corrections that will be the right one, but I normally always go with the simplest kind first, which is the flat correction calling for an impulsive decline down to 113.24 as a minimum target.

Short term we will likely see minor resistance at 115.22 protect the upside for a break below 114.79 for a decline towards 113.93 and maybe even down to 113.55 before the next correction is seen. Only a break above 115.55 will confuse this count a call for a new test of the 115.96 - 116.00 area.

 



EUR/NZD

 

 

As we still have not seen a break above 1.5908 and more importantly 1.5988, which means we could still see a deeper correction towards strong support at 1.5671. However, we are seeing a clear loss of downside momentum, so a break above minor resistance at 1.5710 will be the first indication, that a new rally towards 1.5908 is developing and a break above 1.5908 will be the first indication, that a bottom is in place and the next major rally under way. However as long at minor resistance at 1.5710 protects the upside we must allow for one last move down to 1.5671 first.



Elliott wave analysis of EUR/JPY and EUR/NZD

 

EUR/JPY

 

With the clear break below 113.99 we have got confirmation, that wave 4 is indeed developing. As a minimum target for this wave 4, I expect it to correct 23.6% of wave 3, which should take us down to 112.30, that is a common corrective target for an extended wave. However, for the short term I'm looking for a small rally towards the 114.58 - 114.61 area as a b-wave and then a final c-wave down to 112.30 from where I will turn our focus towards the upside again. That said, we shall remember that 4 waves often is very complex in their structure, which easily could be the case here too.  

 

 

EUR/NZD

 

 

The red wave ii correction did go for the slightly deeper corrective target near 1.5671, where it would have corrected 70.7% of red wave i. The 70.7% corrective target is pretty common in the FX-market. With a low at 1.5688 I do think the red wave ii correction is over and a new rally just ahead. However, we still need a break above 1.5908 and more importantly 1.5988 to confirm that a low has been seen. For the short term we will likely see minor support in the 1.5776 - 1.5786 area protect the downside for a break above 1.5835, which would call for a rally higher towards at least 1.5892 and possibly even higher towards the all important resistance at 1.5988. The risk is a break below 1.5738, that would call for a move closer to 1.5671 before we can expect a new rally higher.



Elliott wave analysis of EUR/USD

EUR/USD

 

 

Despite the very impulsive decline from 1.3299 I still look for renewed weakness once this decline is over. Short term I'm looking for a decline towards 1.3042, where strong short term support will be found. Even a break below 1.3042 will likely not produce more downside, than a move to 1.2972 before the next rally higher. Longer term I'm still looking for a rally above 1.3300 towards at least 1.3491 and possibly even higher towards 1.3833.

 

That said, we must respect a change in the long term picture if we do break back below 1.2972 (daily close below), which will indicate, that wave e of the big running Triangle is over and a new major decline is developing. 

Elliott wave analysis of Crude Oil - The Bearish and the Bullish case

Crude Oil - Bearish option

 

 

Since early 2011 Crude oil has been locked into a USD 30 range between 80 - 110. None of the moves within this range, has really given us any clue, which way this market will eventually break. therefore I will present both cases. The bearish case first (but at this time neutral in my view and will let the market show me, what way it wants to break eventually).

The bearish case sees the entire rally from early 2011 as a major B-wave Triangle, which could push to slightly above 100 before down. A break above minor resistance at 94.00 will confirm the rally higher towards 100. To confirm a downside break we need to see a daily close below 84.07 and more importantly below 77.29, which will call for a major decline in the months ahead.

 

Crude Oil - Bullish Case

 

 

Here too a Triangle dominates the picture, but in this case it's a X-wave Triangle calling for a break above 110.56 eventually to confirm a major rally the months ahead. However in this case we will see a rally to just above 100 before on last decline in wave e to end the Triangle and then the final thrust out of the Triangle to the upside towards 140.00.

 

As I said above right now I don't have a preference for which way the next big move will be. This market will show me, when the time is right....

Elliott wave analysis of EUR/JPY and EUR/NZD

 EUR/JPY

Looking at the shorter time-frame we likely saw a rare fifth wave failure yesterday at 115.96. The failure to break into new high ground materialized to powerful correction, which has reached 114.46 as its low point. However, a break below 114.40 and more importantly a break below 113.99 is needed to confirm, that we did indeed see the top of wave 3 at 115.96 and wave 4 is under way. If we have entered into the wave 4 correction we should see a correction down to at least 112.30. That said, as long as support at 114.40 protects the downside I will look for a new rally higher towards 115.22, but only a break above 115.99 revives the uptrend for a move higher towards the 117.30 - 117.85 area.

EUR/NZD

We are now within striking distance of the 61.8% correction target at 1.5740 of red wave i. We are clearly seeing a loss of momentum and I do expect this support to protect the downside for a new rally. However a break above 1.5908 and more importantly 1.5988 is needed to confirm the bottom for a new rally higher. A break above 1.5988 will call for a new rally higher towards 1.6218 as the first target, but I expect a move higher towards at least 1.6515 in red wave iii and likely even higher. The risk is of cause a clear break below 1.5740, which would call for a continuation down to 1.5671, where we will find the next strong support level.

Elliott wave analysis of EUR/JPY and EUR/NZD

 EUR/JPY

The wave iv correction became a new sub-normal correction, as the correction only fell to 113.13 before taking off again in wave v of 3. I expect this wave v of 3 to reach 117.31, where wave 3 will be 1.618 times longer than wave 1, this is a very common extension target and it's the smallest extension we expect for wave 3. Looking at the short term structure for wave v of 3 we are currently in wave iv of iii of 5 and should soon see wave v of iii of 5 higher towards 116.49 before we expect minor correction in wave iv before the last wave higher towards 117.31.

 

EUR/NZD

The correction from the 1.6218 high has become deeper than first expected, as we are looking at series of zig-zag corrections. As can be seen on the chart we have already corrected 50% of red wave i and it seems as we need a correction towards the 61.% retracement target at 1.5740 before we can expect the next rally higher in red wave iii of iii. That said, a break above resistance at 1.5988 will confirm that the correction from 1.6218 is over and red wave iii is under way towards 1.6218 as its first target, but longer term I will be looking for rally to at least 1.6515 and probably higher as red wave iii develops.