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Elliott Wave Patterns Predict a Heck of a Ride Ahead!

EURUSD

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: Spanish Manufacturing PMI. USD: ISM Manufacturing PMI.

Good evening and happy Friday to you all!

The downside bias has now bee firmly established in EUSUSD,
In Monday nights analysis, I spelled out the reasons this market should fall,
And since Monday night, the price is down 240 points to todays low.

The action today has extended to the downside after a slight sideways correction, now labelled wave '4' green.
wave 'i' pink will complete soon, a likely target is 1.0640, the next support level.
The price should embark on a counter trend rally from there in wave 'ii'.
With 1.0760 forming major resistance.

Overall, the bearish scene seems set from here for EURUSD.
And this market should continue to the downside in a resumption of the bear market.
in the end we will tell tales to our kids and laugh,

of the time when the Europeans tried a single currency against all the best advice!


GBPUSD

30 min

GBP/USD 30-Minute Chart
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4 Hours

GBP/USD 4-Hour Chart
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Daily

EUR/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: Manufacturing PMI. USD: ISM Manufacturing PMI.

Cable turned higher in an extended complex flat correction to the upside.
Wave 'a' has three internal moves, wave 'b' has three internal waves, and wave 'c' looks to be tracing out five waves up to complete.
This fits the 3,3,5 corrective wave structure.

Wave (iii) brown should begin early next week,
A drop below 1.2432, wave 'b' pink, will indicate the market has turned back down again.

Wave (iii) brown has a large downside potential, so it is time to focus on this market.
Any declines early next week will indicate wave (iii) has begun.
The price must not cross above 1.2615 for the immediately bearish wave count o remain valid.


USDJPY

30 min

USD/JPY 30-Minute Chart
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4 Hours

USD/JPY 4-Hour 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: Tankan Manufacturing Index. USD: ISM Manufacturing PMI.

The continued rally off recent lows has added weight to the bullish case,
But it has also shaken up the short term wave count slightly.

I can now count a complete leading diagonal impulse wave off the low at 110.10
Five internal waves within wave (i) green, each taking a three wave form.

The decline off todays high at 112.20 should trace out three waves in a corrective wave (ii)
that wave is either complete at this evenings low or will extend again to create a more complex correction.
Early action next week is critical here, as we may have a bullish higher low completed soon.


Dow Jones Industrials

30 min

Dow 30-Minute Chart
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4 Hours

Dow 4-Hour Chart
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Daily

Dow 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: ISM Manufacturing PMI.

The market did not reveal anything new to us today regarding which short term wave count is the correct one.
Either way this market looks set to decline significantly sooner rather than later.

I am leaning towards the alternate wave count right now,
But early action next week should clear this up.

The low at 20409 is critical to the future path of this market,
And in turn, the larger economy.
Remember a bear market in stocks will begin 6 months to a year before the general economy turns down.

For Monday, watch the high of the previous wave 'a' red at 20592, a break of that high might be enough to turn this market for the final time.


Gold

30 min

Gold 30-Minute Chart
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4 Hours

Gold 4-Hour Chart
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Daily

Dow 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: ISM Manufacturing PMI.

I have taken a more bullish stance on GOLD this evening and adopted the alternate wave count all together.

It looks as if the market has now bottomed in wave (ii) blue and we can expect the price to rally significantly in wave (iii).
Todays action off the 1239.65 low looks impulsive and should develop into a five wave structure in wave 'i' brown.

1239.65 is now key support in the short term, and it should hold.
The 4hr RSI has now turned back up above the centreline again in a bullish sign.
For early next week watch 1239, and the creation of another higher low in wave 'ii' brown.
Key resistance is still 1264.

Thats all for this week,
hope you all have a great weekend.
See you all on Monday evening.

 

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