2018-08-22
EUR/JPY has rallied to a high of 128.06 or 12 small pips above our ideal target at 127.94, but staying below important resistance at 128.48 our slightly preferred count calls for a final dip in wave v/ to complete wave C of II. Normally two of the waves, in a five wave sequence, are equal in length and one wave is extended. In this case wave iii/ clearly is extended, calling for wave v/ to be equal in length to wave i/ and that will leave us a target at 125.43, which is above the low of wave iii/. This is a possibility under the EWP, but a possible failure should never be anticipated in advance, so we need to assume, that wave v/ will dip below the end of wave iii/. The next likely target for wave v/ is seen at 124.62 or just above the start of wave I, this possibility will keep all requirements under the EWP in line, so that will be our assumption. That said, we also need to stress, that wave II is running out of time fast. So any break above 128.48 or a failure to make the expected dip before August 30, will shift the preferred count in favor of a low of wave C at 124.89 and wave III developing already.
R3: 129.48
R2: 129.00
S3: 128.06
Pivot: 127.33
S1: 126.83
S2: 126.05
S3: 125.68
Trading recommendation:
We sold half of our long position at 127.40 for a nice 115 pips profit. We are now 50% long from 126.25 and we will move our stop higher to 126.80 and if done, we will re-buy EUR at 124.75.
Elliott wave analysis of EUR/NZD for August 22, 2018
2018-08-22
EUR/NZD once again failed to break above important short-term resistance at 1.7355 and instead turned around to make a small new low at 1.7211. This is a disappointment and keeps red wave ii alive, but it does not change our larger bullish count calling for more upside pressure above 1.7484 longer-term. To confirm that red wave ii has completed, we still need a break above resistance at 1.7355 and as long as this short-term important resistance remains able to cap the upside, red wave ii could dip closer to 1.7196, but the potential downside should be limited to here for a break above minor resistance at 1.7327 and more importantly a break above 1.7355 confirming red wave iii is developing for a rally above 1.7484.
R3: 1.7355
R2: 1.7327
R1: 1.7275
Pivot: 1.7255
S1: 1.7221
S2: 1.7196
S3: 1.7162
Trading recommendation:
Ous stop was hit for a small loss of 20 pips. We will re-buy EUR at 1.7205 or upon a break above 1.7327 and place our stop at 1.7200.
AUD/USD Testing Resistance, Prepare For Reversal!
2018-08-22
AUD/USD is testing its resistance at 0.7374 (61.8% Fibonacci extension, 61.8% & 38.2% Fibonacci retracement, horizontal overlap resistance), where a reversal to its support at 0.7283 (61.8% Fibonacci retracement) is expected. Stochastic (55, 5, 3) has reversed off its resistance at 95%, where a corresponding drop is expected. We have also identified a bearish divergence with price that contributes to our bearish bias.
AUD/USD is testing its resistance, where we expect to see a reversal.
Sell below 0.7374. Stop loss at 0.7440. Take profit at 0.7283.
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Fundamental Analysis of GBP/USD for August 22, 2018
2018-08-22
GBP/USD has been quite impulsive with the bullish gains recently which lead the price above 1.2850 with a daily close. GBP having positive economic reports recently despite the rising tensions, the currency pushed higher against USD which is indeed quite remarkable.
GBP having pressures of Trade War and BREXIT, the currency was dominated consistently for a series of periods. Recently GBP Public Sector Net Borrowing report was published with a positive decrease to -2.9B from the previous figure of 3.3B which was expected to be at -2.1B. The positive report did help the currency to gain certain momentum having USD being silent without any economic reports recently. Though upcoming economic reports are forecasted to be dovish, any positive outcome on them is expected to inject further bullish pressure in the pair.
On the USD side, today FOMC Meeting Minutes report is going to be held which is expected to have a neutral impact on the USD gains in the process. Ahead of the Core Durable Goods Orders report to be published which is expected to increase to 0.5% from the previous value of 0.2% and FED Chair Powell's speech on Friday certain volatility is expected in the pair. Though USD has been the dominant currency in the pair but having Trade War to impact the USD as well, certain spikes may be observed in the process.
As of the current scenario, GBP gains currently is expected to sustain further until the upcoming high impact USD economic events and reports are published. Though USD is expected to have an upper hand in the long-term, the outcome of the upcoming events is expected to have a greater impact on the overall result and trend establishments.
Now let us look at the technical view. The price has breached above 1.2850 with a strong bullish momentum which is expected to push the price higher towards 1.3050 area in the coming days from where the bearish momentum is expected to continue with the preceding trend in the process. As the price remains below the 1.3200 area with a daily close, the bearish bias is expected to continue further with a target towards 1.2550 in the future.
SUPPORT: 1.2850, 1.2550
RESISTANCE: 1.3050, 1.3200
LONG TERM BIAS: BEARISH
SHORT TERM BIAS: BULLISH
MOMENTUM: IMPULSIVE
Fundamental Analysis of EUR/JPY for August 22, 2018
2018-08-22
EUR/JPY has been quite impulsive with the recent bullish momentum since the bounce off the 124.50-125.50 support area with a daily close. Despite the recent Trade War tension, EURO has gained good momentum over JPY recently which is expected to fade away at the current market situation as series of optimistic JPY report is going to be published this week.
JPY has been struggling to meet the inflation target of 2% recently for which all the BOJ decisions are directed on the bias. As most of the countries are increasing rates, but BOJ is trying to sustain the previous rate until a sustainable growth is observed before the rate hike. Tomorrow, JPY Flash Manufacturing PMI report is going to be published which is expected to have a slight increase to 52.4 from the previous figure of 52.3 and on Friday, JPY National Core CPI report is expected to increase to 0.9% from the previous value of 0.8% and SPPI is expected to be unchanged at 1.2%.
On the other hand, being stuck with the BREXIT effect with UK, EURO has been quite on the top form for a few days now despite the recent volatility against JPY. European Union leaders are currently expecting an agreement sign with UK by November summit which is expected to empower the currency for the long-term, but currently, EURO is not on the total form to have definite strong long-term gains the process. EURO has been quite indecisive with the recent economic reports, but it somehow managed to meet the expectations leading to certain gains against JPY which are expected to be short lived. This week, on Thursday, ECB Monetary Policy Meeting Accounts report is going to be held which is expected to have neutral impact on the further EURO gains, whereas German Final GDP report to be published on Friday is also forecasted to have unchanged value of 0.5%, resting the market to further indecision in the process.
As of the current scenario, JPY is going quite strong with recent economic reports and achieving their fundamental targets in the process, whereas EURO is still struggling with the BREXIT and Trade War tensions. Though EURO gained good momentum recently, but JPY is expected to have an upper hand for the long-term gains in the process.
Now let us look at the technical view. The price is currently residing at the edge of dynamic level of 20 EMA resting at the 127.85 area from where the price is expected to push lower towards the support area of 124.50-125.50 in the coming days. The bias is still quite bearish and expected to remain unchanged as the price remains below the 129.50 area with a daily close.
SUPPORT: 124.50, 125.50
RESISTANCE: 129.00-50
BIAS: BEARISH
MOMENTUM: VOLATILE
Technical analysis of Gold for August 22, 2018
2018-08-22
Gold price has made a marginal new high during the US session and is now pulling back down. Price could not push above $1,200. Gold price has stopped its rise at a major resistance area. A pullback towards $1,180 is justified.
Green lines - bullish channel
Red line - bearish divergence
Gold price is trading inside a bullish channel. Once we break support at $1,191, we should expect at least a pullback towards the 38% or even the 61.8% Fibonacci retracement area. If the price pulls back and makes a higher low, we should be optimistic that a major low is in and the next leg up will at least push towards $1,250. If however, the price starts making lower lows and lower highs, we should expect a move towards $1,140. As far as trading is concerned, short-term traders can short Gold as long as the price is below $1,200-$1,205 looking for a move towards $1,180 at least if not new lows towards $1,140. Gold bulls can try and go long near $1,175 with August lows as stop.
Technical analysis of EUR/USD for August 22, 2018
2018-08-22
EUR/USD has bounced back above the previous support current resistance area at 1.15. Price has reached the long-term downward sloping trend line resistance at 1.16 and the 61.8% Fibonacci retracement of the last leg down.
Red line - bearish divergence
Gold price is trading inside a bullish channel. Once we break support at $1,191, we should expect at least a pullback towards the 38% or even the 61.8% Fibonacci retracement area. If the price pulls back and makes a higher low, we should be optimistic that a major low is in and the next leg up will at least push towards $1,250. If however, the price starts making lower lows and lower highs, we should expect a move towards $1,140. As far as trading is concerned, short-term traders can short Gold as long as the price is below $1,200-$1,205 looking for a move towards $1,180 at least if not new lows towards $1,140. Gold bulls can try and go long near $1,175 with August lows as stop.
Technical analysis of EUR/USD for August 22, 2018
2018-08-22
EUR/USD has bounced back above the previous support current resistance area at 1.15. Price has reached the long-term downward sloping trend line resistance at 1.16 and the 61.8% Fibonacci retracement of the last leg down.
Red line - support
Blue line - long-term trend line resistance
EUR/USD has reached a critical inflection point. The price is challenging the downward sloping trend line resistance that comes from 1.24. The price has also reached the 61.8% Fibonacci retracement from the 1.1790 area decline. If the bearish trend is to continue, the prices should reverse lower from current levels. If the medium and longer-term trends are about to change to bullish, we should see a continuation of this upward movement.
Blue line - long-term trend line resistance
EUR/USD has reached a critical inflection point. The price is challenging the downward sloping trend line resistance that comes from 1.24. The price has also reached the 61.8% Fibonacci retracement from the 1.1790 area decline. If the bearish trend is to continue, the prices should reverse lower from current levels. If the medium and longer-term trends are about to change to bullish, we should see a continuation of this upward movement.
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