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Dollar Strength is Coming, the Waves Say So!

By: Enda Glynn | Saturday, March 18, 2017


EURUSD

Current wave 3 down - below parity.


30 min

EUR/USD 30-Minute Chart
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4 Hours

EUR/USD 4-Hour Chart
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Daily

EUR/USD Daily Chart
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My Bias: short in wave 3 blue.
Wave Structure: downward impulse wave 1, 2 blue
Long term wave count: lower in wave 3 blue
Important risk events: EUR: German Buba President Weidmann Speaks. USD: FOMC Member Evans Speaks, President Trump Speaks.

Good evening everyone, and a happy St Patricks day to you all!

EURUSD did drop today but nothing significant so far.
I want to see a decline below the support level of wave 3 pink at 1.0715 before calling the high in place.

It is worth noting on the 4hr chart, the impulsive and rapid nature of the declines VS the overlapping, labored and corrective nature of the rallies.
This is the essence of the difference between a trend move and a corrective move. If you want to know more, check out my mini course at - elliott-wave-theory-course/

The resistance levels that lie above at 1.0828 and 1.0872 should repel the price downward next week.
the next best alternative wave count is still very bearish but will allow for a further extension of this countertrend rally.
I will deal with that If needs must!
For next week, I will again be watching for a bearish signal off the highs.


GBPUSD

Wave 2 red, downtrend resumed.


30 min

GBP/USD 30-Minute Chart
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4 Hour

GBP/USD 4-Hour Chart
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Daily

GBP/USD Daily Chart
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My Bias: short below parity.
Wave Structure:  continuing impulsive structure to the downside in wave (5)
Long term wave count: decline in wave (5) blue, below parity
Important risk events: GBP: N/A. USD: FOMC Member Evans Speaks, President Trump Speaks.

This weeks action has not brought any clarity to the debate over which is the correct interpretation of the short term action.
The rise off the recent low is currently labelled as wave 'c' of 'ii'.
This wave count calls for an acceleration to the downside soon.
The alternate wave count, a rally in wave 'E', allows for a further rise into 1.2600 before finally declining back into trend.

Next weeks action should bring clarity to this indecision, as the wave structure is at a pivotal point.
That being the 61.8% retracement level of wave 'i' pink.
An impulsive turn down from here tips the balance in favour of the current wave count.
Whereas a corrective decline from here favours the alternate wave count.


USDJPY

LONG


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USD/JPY 30-Minute Chart
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4 Hours

USD/JPY 4-Hour 30-Minute Chart
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Daily

USD/JPY Daily Chart
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My Bias: LONG
Wave Structure: rally in wave [C]
Long term wave count: wave [C] is underway, upside to above 136.00
Important risk events: JPY: N/A. USD: FOMC Member Evans Speaks, President Trump Speaks.

Wave 'c' pink has now reached support at 112.60, a level which I had spoke about early this week.
The decline in wave 'c' is deep but, wave 'c' now has a complete five wave structure internally,

The expanded flat wave 'ii' is now completed and must now turn up impulsively, and create a higher low off current lows as the price turns bulish again.
the lower invalidation line at 111.57 is staring us in the face, and that is why price must turn now.
I have shown te 1 hr chart this evening, there is a clear bullish divergence between momentum and price now.
A break of 113.75 to the upside would add weight to the bullish outlook.


DOW JONES INDUSTRIALS

Topping in wave (5)


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Dow Industrials 30-Minute Chart
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4 Hours

Dow Industrials 4-Hour Chart
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Daily

Dow Industrials Daily Chart
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My Bias: market top is in.
Wave Structure: Impulsive 5 wave structure, possibly topping in an all time high.
Long term wave count: Topped in wave (5)
Important risk events: USD: FOMC Member Evans Speaks, President Trump Speaks.

The rise off yesterdays lows looks corrective so far.
I have labelled the structure as a developing waves 1,2 in red.
this suggests the market could drop in wave 3 red early next week.

the evidence is starting to pile up that the market has now topped in a final all time high.
If that is the case, I am not looking forward to the catastrophe which awaits us as this bear market unfolds.

There is a good case that a head and shoulders pattern is in place around that all time high.
This is another hint that a trend change is at hand.
A break of support at the recent wave 'i' low of 20777 will be another nail in the coffin.
That is the pivotal level for next week.


GOLD

Current wave [B] - Long to 1550


30 min

Gold 30-Minute Chart
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4 Hours

Gold 4-Hour Chart
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Daily

Gold Daily Chart
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My Bias: Long towards 1550
Wave Structure: ZigZag correction to the upside.
Long term wave count: Topping in wave (B) at 1500
Important risk events: USD: FOMC Member Evans Speaks, President Trump Speaks.

GOLD remains in a holding pattern in a possible wave '4' pink.
The lows of 1224 will likely be retested in a possible flat or developing triangle wave '4'.

A corrective decline off an impulsive rally is just the sort of signal I have been waiting for in GOLD.
The over-bearish sentiment of late has put this market in a prime position to rally strongly for the foreseeable future.

For next week I want to see 1224 hold the price and more impulsive action follow off that level.

 

Author: Enda Glynn

Enda Glynn
bullwaves.com

Enda Glynn

I class myself as an Elliott wave trader now, but that's not how I started out though! It took me a long time and a whole lot of pain, to finally understand what drives the price and how to use Elliott Wave correctly!

I have been trading for years and I have tested every trading system and strategy under the sun! I used to pick entry points at random based on emotion or news events or something I heard on TV! It did not take long to destroy my capital! I have blown out my account balance before, and I had to start again,

from scratch!

Believe me, I am well acquainted with failure in trading! Im sure that the above scenario is pretty familiar to you too. We have all been there. About 10 years ago I discovered The Elliott wave Principle and its method of market analysis. Since then, I have spent years learning, testing and trading, using the wave principle as the backbone of my analysis. I even went to college to study macroeconomics and econometrics. I graduated with honours degree back in 2012. The financial market knowledge and statistical edge I gained after my degree added another level to my trading. The difference in my trading approach using the wave principle, compared to before, is like night and day.

The price started to move "my way" more and more often. The wave model, offers me a lens to view market action through, which no other form of analysis can do. Elliott wave analysis, helps me answer four key questions when I am contemplating a trade:

• What direction the price is trending.
• How far is this trend likely to go.
• Where can I enter a trade with the best risk reward ratio.
• And most importantly, at what point am I definitely wrong?!

The wave principle helps me improve my trade entry, tighten up my money management and in turn increase profitability. Seeing the waves unfold before your eyes is a very rewarding experience, It is almost like peering into the future! That is how the wave principle helps my trading, and that is why the wave principle will improve your trading. It took a long time to finally master Elliott Wave Principle. After over a decade of hard work, research and learning I can call myself an expert in the field. I regularly contribute to major trading communities at FXStreet, Forex Factory, Traders Planet. I am a chief Elliott Wave analyst at HumbleTraders.

Copyright © 2016-2017 Enda Glynn