Daily-Elliott-Wave-Analysis-01-27-17- USDJPY approaches near term target wave count suggests a turn.

EURUSD

Current wave 3 down – below parity.

30 min

4 Hours

Daily

My Bias: short in wave 3 blue.
Wave Structure: downward impulse wave 1, 2 blue
Short term wave count: lower in wave 3 green
Long term wave count: lower in wave 3 blue
Important risk events: EUR: Spanish Flash GDP q/q, German Prelim CPI m/m. USD: Core PCE Price Index m/m, Personal Spending m/m, Pending Home Sales m/m.

Happy Friday everyone!

EURUSD remained pretty flat on the day prompting a slight alteration to the current wave count.
The current wave count calls for a substantial decline to begin next week in wave (iii) green.

The rise off the lows of Thursday look to be in three waves which does support the bearish short term outlook.
but the resistance at 1.0774 needs t hold and the decline must start soon to remain bearish in the short term.

I want to see a break of support at 1.0587 to confirm the beginning of wave (iii).
the 4 h MACD dropped below the centreline yesterday, so that’s a MACD sell signal in the bag, lets see how this develops.

GBPUSD

Wave 2 red, downtrend resumed.

30 min

4 Hours

Daily

My Bias: short below parity.
Wave Structure:  continuing impulsive structure to the downside in wave (5)
Short term wave count: Downside from 1.2385 to 1.1900
Long term wave count: decline in wave (5) blue, below parity
Important risk events: GBP: N/A. USD: Core PCE Price Index m/m, Personal Spending m/m, Pending Home Sales m/m.
Cable flat lined also today, although I think the internal wave structure on display is slightly clearer that EURUSD.
The price is most likely declining in wave ‘iii’ pink right now.
A break of the previous wave ‘i’ high at 1.2371 will confirm the downtrend has resumed.

After todays trade the both the 4hr RSI and MACD have taken a dive to the downside and look like registering momentum sell signals soon.
As always the thing to watch for is the creation of a head and shoulders lower high off 1.2672, wave 2 red.
That is what I am looking for next week.

USDJPY

LONG

30 min

4 Hours

Daily

My Bias: Neutral
Wave Structure: rally in wave [C]
Short term wave count: wave [v] grey
Long term wave count: wave [C] is underway, upside to above 136.00
Important risk events: JPY: Household Spending y/y, Monetary Policy Statement, BOJ Outlook Report, BOJ Policy Rate. USD: Core PCE Price Index m/m, Personal Spending m/m, Pending Home Sales m/m.

USDJPY continued its rise in wave ‘c’ today.
The price has rallied 230 points since Wednesday where the new wave count called for a rally to complete wave (b) green.

So far so good, but the price is now nearing on that target at 115.60 which will create a double top.
From that point a lower high will signal a turn to the downside in wave (c) green.
Preliminary targets for the completion of wave (c) are between 108.00 and 110.00.
First the price must top out and turn down.

DOW JONES INDUSTRIALS

Topping in wave (5)

30 min

4 Hours

Daily

My Bias: Long towards 20,500
Wave Structure: Impulsive 5 wave structure, possibly topping in an all time high.
Short term wave count: Upside from 17,066 wave 4 blue
Long term wave count: Topping in wave (5)
Important risk events: USD: Core PCE Price Index m/m, Personal Spending m/m, Pending Home Sales m/m.

The DOW has been in a corrective mode all day.
The triangle idea did not pan out, but I believe the price has completed a flat correction in wave ‘iv’ pink.
That leaves wave ‘v’ to come to complete wave (i) grey.
So next week will likely be a consolidation week while the price corrects in wave (ii) grey.

The larger wave count is calling for major declines to begin once this final rally is complete.
The price confirmation point for that bear market lies at 19674, the low of wave [iv] green.
That level is one to keep in mind in case the larger rally fails to develop.

GOLD

Current wave [B] – Long to 1550

30 min

4 Hours

Daily

My Bias: Long towards 1550
Wave Structure: ZigZag correction to the upside.
Short term wave count: Upside from 1120~, target 1500
Long term wave count: Topping in wave (B) at 1500
Important risk events: USD: Core PCE Price Index m/m, Personal Spending m/m, Pending Home Sales m/m.

Gold carved out one more low today reaching 1180.40, the afternoon brought another impulsive $10 rally which could mark the turn.

At this point I am of the opinion that wave (ii) is complete.
Next week should bring wave (iii) and a substantial rally.
If you look at the 4hr RSI, you can see that it has now completed 3 lower higher highs since the extreme low of last September.
This speaks to a larger bullish trend operating in the market one that is now gearing for the acceleration phase in wave (iii).
I will be looking for signs of that turn next week.
Have a great weekend everyone.