A very good evening to one and all.
Despite a shock to the system last night, the sharp USD rally has not invalidated any of the operating wave counts. Although it is a picture of what is to come for the USD in the near future, The short term wave counts are pointing to one last push up before completing the larger structures.
GBPUSD
30 min
4 Hours
Daily
My Bias: short below parity in wave (5). 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: Prime Minister May Speaks. USD: N/A.
Cable is showing more strength today after a a slight new low last night. Wave '4' grey seems to have traced out an expanded flat correction and wave '5' grey is now likely underway with a target at 1.3700 to complete wave 'v' pink.
Key support in the short term is at the high of wave '1' grey. So 1.3406 is the level to watch as a short term invalidation point. If this level breaks, it is likely that the market has topped out.
The 4hr chart shows a bearish momentum divergence right now, So this rally could end quickly.
For tomorrow; watch for 1.3450 to hold and wave 'v' to reach the upper trend line one last time.
USDJPY
30 min
4 Hours
Daily
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: N/A.
USDJPY held on to most of its recent gains today. Even the short term decline off the todays high at 112.71 looks to be in a corrective three wave form.
I have labelled the current structure in the most bullish fashion. With waves 1,2 pink complete and wave '3' pink underway. Key support lies at the wave 'ii' brown low of 111.04. The price should not break as wave 'iii' brown develops.
For tomorrow; The low of the session was at 112.13, Watch for that level to hold in wave '2' pink. Wave '3' should carry price higher into the high 113 range.
GOLD
30 min
4 Hours
Daily
My Bias: Long towards 1550 Wave Structure: ZigZag correction to the upside. Long term wave count: Topping in wave (B) at 1550 Important risk events: USD: N/A.
I am starting to think that the short term wave count in gold does not account for the larger decline off the recent high very well. It is possible that the alternate wave count shown on the daily chart is more fitting. That wave count far more bullish in the medium term and calls for a succession of higher lows in a bullish series of 1,2 waves to the upside.
I will introduce that alternate count if the price drops below support 1274.
For the moment, The declines labelled wave (iv) blue seemed to have concluded. The 4hr chart shows that momentum has reached a bearish extreme. The price should turn up from here, according to both wave counts.
For tomorrow; 1315 remains the key level to cross to indicate a turn back up into wave (v) blue.
U.S CRUDE OIL
30 min
4 Hours
Daily
My Bias: topping in a large correction fourth wave. Wave Structure: ZigZag correction to the downside. Long term wave count: Declining in wave 'c' target, below $20 Important risk events: USD: N/A.
The short term action in crude shows that wave (iv) grey has taken a more complex form. It now seems likely that wave (iv) grey has traced out a triple combination correction.
This wave form is about the most complex you can get! It forms out of three separate complete corrective patterns join to create a larger three wave pattern.
I have shown a declining trend channel in wave 'c' of (iv). This trend channel suggests a further decline in price towards 49.00 to complete wave (iv) grey.
For tomorrow; The high labelled wave 'b' is at 51.11 in the cash market. That level should hold tomorrow as wave 'c' closes out. The price should bottom in the 49.00 area to complete wave (iv) grey.
Read more by Enda Glynn
