S&P500 and German Dax Elliott Wave Analysis – More Upside After A Correction

S&P500 is down out of an ending diagonal (wedge) pattern in the 4-hour chart, which means that wave five of three can be completed and higher degree wave 4 correction already underway that represents three-wave A)-B)-C) corrective movement. Well, currently we are tracking wave B) which can be even bigger or more complex one, so we will have to be aware of another wave C) decline later down to 4200-4000 support zone. Resistance is 4500 – 4550.

S&P500 Elliott Wave Analysis Chart

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DAX is coming sharply higher, probably due to positive sentiment as DAX30 is now becoming a DAX40 as 10 new companies were added to the list. So far, we can see a nice and sharp reversal higher which is looking very impulsive so we have to respect the strong bullish price action, especially if we consider that drop from August high was in three waves. We see that as a contra-trend move that represents wave four of a higher degree so be aware of more upside, especially after set-back into wave 2)/B).

German DAX Elliott Wave Analysis Chart

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EURUSD Elliott Wave Cycles Look For A Support

However, the USD has seen some nice recovery already ahead of the event so it might have been priced in, thus any reversal may not be a surprise.

EURUSD is coming down from 1.1905, now approaching August levels after the FED press conference yesterday when USD bounced after some hawkish approach regarding tapering. Notice that drop from 1.1905 can even be counted in five waves so it’s a bearish trend, but again it may cause some rally in the short-term, in minimum three waves if channel resistance is broken. We still think pair will stabilize sooner or later.

EURUSD 4h Elliott Wave Analysis

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GOLD and Silver Elliott Wave Cycles Approaching Support

Back in August Gold made nice and impulsive rally away from 1685 lows, as seen on the 4-hour chart that we labeled as first leg A) of a three-wave recovery within higher degree wave D. So, with current three-wave A-B-C pullback for B), seems like gold may find the base soon, ideally here around 61,8% Fibonacci. retracement, which means that we have to expect another recovery within wave C) of D up to 1850 area, especially if price recovers back above 1782 region.

GOLD 4h Elliott Wave Analysis Chart

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Technically Gold is bouncing from lower Bollinger band and we can we bullish divergence on 4h GOLD chart, seems like Gold searches for the support.

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Silver is coming even lower in the 4-hour chart, now breaking even August lows, so we are tracking final wave 5 of a bigger ending diagonal (wedge) pattern that can find the support soon, ideally here in the 22 – 20 zone, but keep in mind that bulls could be back in the game only if we see a recovery back above 24.80 region.

Silver Elliott Wave Analysis

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Like GOLD, Sliver is also forming bullish divergence on 4h chart means support is nearby.

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Japanese Yen Currency Pairs Elliott Wave Analysis – Looking Higher

As per Elliott Wave analysis, AUDJPY made a deep pullback in the last few months from 86.00 area, but this can be a contra-trend move if we consider that market came down with overlapping price action after previously completed five waves up. Such pullbacks are normal. What is very interesting now, is a bounce away from 78.44 support and current rise back to the upper side of a channel where breakout is expected to cause more bullish price action as higher degree wave B) can be finished.

AUDJPY Daily Elliott Wave Analysis Chart

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CADJPY came down to 85.30 support, back to the former wave four from where we can already see some bullish price action. In fact price is trying to break out of a downward corrective channel that can bring more gains ahead, especially if we consider that drop from 91.00 area is having a corrective look, thus it can be wave B so ideally higher degree wave C is in play.

CADJPY Daily Elliott Wave Analysis Chart

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Ethereum Elliott Wave Analysis: Two Wave Formations

For now, we are still looking for strong resistance zone and intraday bearish turn at least in three waves as we see bearish wave formations. However, keep in mind that these intraday structures look corrective within uptrend as well, so it’s important to wait for confirmations.

If Crypto market faces a sell-off within projected third waves, then bears are back as expected, but if Crypto market stays strong and at the highs, then we may see even bigger recovery according to daily ALTernate counts.

As per Elliott Wave analysis Ethereum, ETHUSD is in a bigger recovery mode like Bitcoin, but we still see an A-B-C corrective movement within wave B that can find the resistance here around 61%-78,6% Fibonacci retracement and 3300-4000 area.

Ethereum Daily Elliott Wave Analysis Chart #1

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However, in case of a bigger recovery, we can also consider a five-wave bullish impulse after a completed three-wave A-B-C corrective decline from the highs as it’s shown in the COUNT #2.

Ethereum Daily Elliott Wave Analysis Chart #2

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Dash and Bitcoin Cash Elliott Wave Analysis – Be Aware Of Reversal Down

For now, we are still observing a minimum three-wave a/1-b/2-c/3 decline, but we prefer wave 3, so watch out for more downside pressure this week, especially if the price drops towards wave 3 levels.

DSHUSD is coming above June highs and 200 area, but we are still looking for a potential a-b-c flat correction within wave B that can find the resistance around 280 – 330 zone, just keep in mind that upside can be limited and a reversal down for wave C may occur anytime soon.

Dash 4h Elliott Wave Analysis Chart

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BCHUSD is in a bigger intraday recovery mode, but also as part of a three waves A-B-C flat correction in wave (B), so watch out for limited rise and be aware of another reversal down for wave (C), probably and ideally here around 800 – 1000 area.

Bitcoin Cash 4h Elliott Wave Analysis Chart

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Bitcoin and Ripple Elliott Wave Cycles Approaching Resistance

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However, just in case BTC. Dominance kicks in and if we see much bigger recovery, then also keep an eye on alternative count, where A-B-C corrective decline from the highs can be completed.

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Ripple, XRPUSD made a bigger recovery, but we still see it as a correction, probably as part of wave B of (C), so be aware of a reversal down again, ideally here around 61,8% – 78,6 Fibonacci retracement. However, even if a higher degree wave (C) is completed labeled as ALTernate count and if current recovery is already wave (D), then we still need to see another, maybe final slow down for wave (E)

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EUR/USD & AUD/USD Elliott Wave Cycles Approaching Support

As per Elliott Wave analysis, EURUSD is coming down into wave 5 which is breaking now beneath March levels, so pair is moving closer to our projection levels for a fifth wave at 1.16-1.1650 area, where pair may find some support. But even if this will be a temporary support a rally should occur in three waves minimum

EURUSD 4h Elliott Wave Analysis Chart

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AUDUSD is in downtrend now falling sharply within wave 5) towards our projection targets near 0.7150. For now bears are strong so it would be too soon to look for any bottom formation. Even if we are tracking a fifth wave here, you never know how extended fifth wave can be, so it’s important to be patient and wait on confirmation before turning to the other side of a trend. In our case we need five waves up back into a triangle area which is expected anyhow based on EW guidelines as move out of a triangles are final in a sequence

AUDUSD Elliott Wave Analysis Chart

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Crude OIL Elliott Wave Analysis Points Support Around 64-63 Area

At the same time stocks and metals are higher. So for now, looks like a risk-on, but miss on the initial US University of Michigan sentiment reading for August suggests that we should be careful at current price levels when looking at indexes. At the same time we shall be observing the situation in Afghanistan very closely as any military actions could cause a new support for crude oil.

Crude OIL has made a strong and clear directional move in the last year from 7.0 to 75 level. But now it has some hard times to attract the buyers, probably due to speculation that new lock-downs will have impact on demand.

As per Elliott Wave analysis, we see energy in a corrective price action, a complex one which it may find some support this week around 63-64 area to complete a three wave drop from 74.00; either as wave B or wave Y).

Crude OIL 4h Elliott Wave Analysis Chart

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Ripple and Litecoin Elliott Wave Cycles Approaching The Resistance

Ripple Coin, XRPUSD is coming down following Crypto market sell-off and we warned about that long time ago. We are tracking a complex W-X-Y corrective within wave (C) and there can be room for more weakness, as strong 0.40 – 0.20 support area is still waiting before bulls show up. However, any bigger recovery back above 1.10 region would be signal for a completed wave Y of (C).

Ripple Daily Elliott Wave Analysis Chart

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Litecoin, LTCUSD can be still trading within a deeper, higher degree AB-C correction that can send the price back to 100, maybe even down to 95 – 65 support zone, just watch out for more complex wave B which can be still a potential bearish running triangle pattern or maybe bigger flat that can retest 200 resistance area

Litecoin Daily Elliott Wave Analysis Chart

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Litecoin and Dash Elliott Wave Cycles Point Resistance

  • Most crypto currencies trade at resistance
  • Litecoin unfolds bearish running triangle
  • DASH is till looking lower for wave C

As per Elliott Wave analysis, LTCUSD can be still moving within a bigger bearish running triangle formation of wave B, ideally as part of wave (C) of C, so watch out for limited gains around 150 level. However, in case of much bigger recovery, then we may also consider a flat correction within wave B which can retest 200-250 resistance area.

Litecoin 4h Elliott Wave Analysis Chart

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Despite that recent spike, DSHUSD can be still looking lower for wave C, but ideally once a bearish running triangle in wave B fully unfolds, where the final wave “e” can be now in play So, be aware of that drop back to lows for wave C before we will see a bigger recovery. However, just in case if rises back above 200 area, then we may still consider an irregular flat correction in wave B as an Alternate count that can retest 200-250 resistance zone

Dash 4h Elliott Wave Analysis Chart

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GBP/USD Elliott Wave Cycles Point Higher To Yearly Highs

Summary

  • Covid cases drop in the UK
  • BOE can have positive impact on Cable
  • GBPUSD unfolds wave 5 to the yearly highs

Also BOE policy this Thursday can have a positive impact on cable as well.

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GBP/USD is bouncing away from 38.2% Fibonacci support level as expected which suggests that wave four might have ended and that wave five is underway back to the yearly highs. In the meantime 1.3474 remains invalidation level as wave four must not trade into a territory of a wave one.

GBPUSD Daily Elliott Wave Analysis Chart

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On 4h chart we can see pair is making a nice five waves up from the lows so this trend will be expected to resume after any three wave set-back. First support is at 1.384 area while lower support zone is then at 1.3720-1.3785.

GBPUSD 4h Elliott Wave Analysis Chart

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Elliott Wave Cycles Point Major Forex Pairs Trade At Bottom

Summary

  • Major pairs trade at the bottom
  • EURUSD tries to complete an ending diagonal
  • GBPUSD bounced with impulsive wave structures
  • Aussie is also trying to find the support

First support is at 1.1760 followed by 1.1700. Divergence on the RSI also indicates a potential bounce, ideally once an ending diagonal is finished.

EURUSD 4h Elliott Wave Analysis Chart

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GBPUSD is turning around after a nice five wave drop to 1.3569. We have seen a drop below April level for a short period of time which gives an impression that market has bottomed, possibly even completed flat correction. However, the most important is current intraday bullish impulse from the low which suggests more upside ahead, especially after a broken channel resistance line near 1.3800

GBPUSD 4h Elliott Wave Analysis Chart

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AUDUSD turned back to the lows again but it came down out of wave 4) running triangle pattern which suggest the final leg, probably wave 5) of C is unfolding, before a reversal. So, bounce and recovery may occur anytime soon, ideally in impulsive fashion which is needed to confirm a change in trend.

AUDUSD 4h Elliott Wave Analysis Chart

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Bitcoin: Elliott Wave Cycles Approaching The Support

  • BTC inflows triggers more weakness
  • BTC unfolds first leg of A-B-C correction within Wav (IV)
  • Supports: 24k, followed by 20k.

What we also noticed recently is that there were a lot of BTC inflows recenty, which makes you wonder why? It may sound bullish, but its not. “”Its like if bring a car into a car-shop; you obviously have a different idea-exchange it for something else.” It can be one of the reasons why BTCUSD can see a final dip, maybe even on big volume which was often the case on cryptocurrencies before market stabilized; similar personality with downtrend on stocks.

Bitcoin inflows

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From an Elliott Wave approach BTCUSD turned down exactly from projected resistance area back in April when we spotted a top with an ending diagonal that completed wave V of (III). So far we see a nice turn down into wave (IV) correction, which will obviously take even more time to unfold as we see five waves down from the highs as part of the first leg, wave A. So, after a corrective recovery in wave B, that can occur anytime soon, we will have to be aware of another sell-off for wave C to complete a three-wave A-B-C correction .

Bitcoin Daily Elliott Wave Analysis Chart

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Bullish Looking Crude Oil May Push USDMXN Even Lower

As you may already know, in risk-on sentiment investors are confident, so stocks are bullish. Risk-on mode is in play since March lows and seems like it may continue into January of 2021.

The main reason for a bullish continuation in the stock market in risk-on mode is also bullish looking Crude oil, which has an unfinished five-wave cycle, So more upside is in view for wave »v« towards 50 level, ideally once a correction in wave »iv« fully unfolds with ideal support in the 46-44 zone.

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Bullish continuation on Crude oil may cause more weakness for the USDMXN pair since we know they are in negative correlation. So, USDMXN could easily continue lower, at least for one more push to the downside, especially because of recent short-term A-B-C corrective recovery.

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