Daily-Elliott-wave-analysis-12-29-16- GOLD bullish signals are lining up.
Current wave 3 down – below parity.
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 CPI y/y. USD: Chicago PMI.
Good evening everyone.
EURUSD stuck to the plan today.
Rising in a possible wave ‘c’ brown.
This rise is likely the completion of a flat correction in wave (ii) green.
1.0480 was the minimum target, prices rose above that today.
It looks likely that 1.0520 will be reached, but vigilance is advised as the downside risk is quite high right now with this completing corrective pattern.
if the current wave count is correct, then we are moving into wave (iii) of 3, so things could get violent from here.
A touch of the upper trendline at 1.0520 and a lower high will offer a good entry opportunity on the short side.
My Bias: Long towards 1.2900
Wave Structure: Zigzag upside correction
Short term wave count: Upside from 1.1800 – 1.2080, Upper target 1.3400
Long term wave count: Rally in wave (4) blue, Upper target 1.3400
Important risk events: GBP: N/A. USD: Chicago PMI.
The wave count in cable is diametrically opposed to the EURUSD wave count, this is concerning for the prospects for a rally in Cable.
This would indicate serious EURO weakness rather than Dollar strength.
I have prepared an alternate wave count for cable if the rally does not materialise.
The invalidation point for the bullish outlook is at 1.2079 so at the very least we know at which point to switch focus.
It does look as if the decline has lost momentum at this point, with the 4HR technicals all looking up.
At the very least we can expect a relief rally, a possible initial target would be the wave ‘A’ high of 1.2470.
Current wave [iv] – Short to 108.00
My Bias: short to 106.00
Wave Structure: rally in wave [C]
Short term wave count: wave [iii] grey
Long term wave count: wave [C] is underway, upside to above 136.00
Important risk events: JPY: N/A. USD: Chicago PMI.
I have shown another possible interpretation of the short term action today.
This count views the sideways action of late as a flat in wave iv brown.
The price came within a hair’s breadth of the invalidation line today and is still in the danger zone as I write.
So lets see what the overnight action brings, a move back above the wave ‘b’ high at 117.79 would save the bullish outlook.
DOW JONES INDUSTRIALS
Wave [ii] possibly underway
My Bias: Long towards 21,000
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: Chicago PMI.
The DOW stalled today in a possible correction within wave 3 green to the downside.
The outlook form here is bearish in a possible wave (i) grey, or more importantly, a possible completed all time high, not to be revisited!
Price broke down through 19858, the previous wave 4 green, and that level has now formed resistance today.
Given that both larger degree wave counts are in a bearish setup, it is prudent to view the current price action with a negative bias.
19858 may well form resistance again in any minor rally,
Watch for a break of todays low at 19784, The 4hr technicals are in solid negative territory now so it may just need a straw to break this camels back.
Current wave [B] – Long to 1550
My Bias: Long towards 1550
Wave Structure: ZigZag correction to the upside.
Short term wave count: Upside from 1120~, target 1550
Long term wave count: Topping in wave (B) at 1550
Important risk events: USD: Chicago PMI.
The Gold price has now possibly bottomed after todays bullish price action.
The price pushed up through 1151 in a sharp thrust, which has all but invalidated the short term bearish outlook.
The best interpretation of the previous structure is that wave 5 blue was a failed fifth wave
And wave B red is now complete at 1125.82
It is now time to start testing the market to the upside.
A break of 1165, the previous wave 2 blue will add serious weight to the bullish outlook.
The short term trend channels that are being formed should act to hold the price structure for now,
With major support at the lower trendline.
I will test the market on the long side if the price retreats to those trendlines while holding higher lows.
This market is one to watch.