EUR/GBP and EUR/JPY Elliott Wave Analysis: Approaching Low

EURGBP Daily Elliott Wave Analysis

EURGBP keeps moving lower on a daily chart, but we see it approaching important support zone. If we consider that that it’s running out of steam within an ending diagonal pattern for wave 5 of (C), then bullish reversal can be around the corner, we just need price confirmation.

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EURJPY 4hElliott Wave Analysis

EURJPY came higher, up to 133 as expected, but then it fell sharply, clearly in impulsive fashion back to 130.30 area, which suggests that impulse from 128.20 is completed. As such, we see room for more weakness in the short-term to complete an A-B-C drop that can be underway within a higher degree triangle.

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S&P500 and German DAX Look For A Recovery: Elliott Wave Analysis

13:30GMT CAD CPI and US Retail Sales, Crude Oil inventories at 15:30GMT and very important FOMC minutes at 19PM GMT.

German DAX Elliott Wave Analysis

Bearish move on stocks slowed down with European shares turning sharply higher as Russia-Ukraine conflict has calmed down a bit. Investors are more optimistic it seems if we respect what German DAX is doing; it’s making a nice and strong recovery that looks like an impulsive in progress.

On 4h chart, we see that German DAX index moving sideways, ideally within sub wave (C) of a wave D recovery that can see 15900-16k area.

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S&P500 Elliott Wave Analysis

SP500 is coming down after US CPI figures last week and also following the US announcement that Russia will invade Ukraine. These are strong words so investors are going out of stocks, and that’s why we are seeing SP500 coming down even more from 4595 resistance, but so far only with three waves so it can even be a wave X as part of wave B) rally. Nice resistance remains at 78.6% near 4700-4750. Sharp drop to around 4300 will suggest that wave C) down is already underway.

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Cryptocurrencies Bitcoin and Ripple Eye Further High: Elliott Wave Analysis

So risk-off is having a bearish impact on cryptos as well but there’s still a chance for bounce and recovery.

Bitcoin Elliott Wave Analysis

Bitcoin the largest crypto currency is showing first evidence for a potential bottom formation in the 4-hour chart and seems like it’s unfolding a five-wave bullish cycle within higher degree wave (A). If that will be the case, then we can expect a bigger (A)-(B)-(C) recovery in upcoming weeks, we just have to be aware of a pullback in wave (B) before we will see more upside within wave (C).

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Ripple Elliott Wave Analysis

Ripple XRPUSD the sixth largest crypto currency, is showing strong reversal up and seems like it’s unfolding five waves up that suggest a bullish reversal, especially if recovers back to 1.0 area.

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S&P500 and German DAX Elliott Wave Analysis: More Upside Can Be Seen

Probably it was due to higher 10 year US yields. Stocks also came down for correction after which, we can week at least one leg up.

S&P500 Elliott Wave Analysis

S&P500 is coming down after US CPI figures, away from 4595 resistance, but so far only with three waves so it can even be a wave X as part of wave B) rally. Nice resistance remains at 78.6% near 4700-4750. Sharp drop to around 4300 will suggest that wave C) down is already underway.

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German DAX Elliott Wave Analysis

We see German DAX in a big fourth wave on a daily chart, meaning more upside can be seen in upcoming months, possibly after a completed triangle which can be in the final stages or still in progress. On 4h chart, we see that index is still in a sideways consolidation, but still within uptrend as a three-wave (A)-(B)-(C) rally for wave D that can send the price into 15900-16k area.

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Metals GOLD and Palladium Complete The Recovery: Elliott Wave Analysis

GOLD 4h Elliott Wave Analysis

Gold made a sharp and strong turn down from 1850 area as expected after we noticed a completed ending diagonal in wave C of B). It’s very strong decline with a break below the trendline support that suggests more upcoming weakness into wave C) of E. Ideally we will see a continuation down now, after a)-b)-c) a corrective rally into 61.8% Fib. Drop below 1800 will suggest we are on the right track.

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Palladium Daily Elliott Wave Analysis

Palladium made a nice three-wave A-B-C correction after we noticed five waves of decline from the highs, so we may now have a nice bearish setup formation. If we are right about bearish looking gold and silver, then even Palladium could sells-off, but keep in mind that bearish confirmation is only below 2000 level.

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Bitcoin and Ripple Find Bottom? Elliott Wave Analysis

Notice that Crypto made a weekend rally, which can be easily a bull-trap. However, there are definitely interesting support levels, so if we see a five-wave recovery in upcoming days, then we can easily confirm bulls back in play.

Bitcoin, BTCUSD is showing first evidence for a potential bottom formation in the 4-hour chart, but it’s too early to confirm the low and support in place. Currently we can see only a three-wave rally, which can still belong to an A-B-C correction, but if we see bigger recovery in upcoming days with five waves back to 52k level, then bulls could be back in the game.

Bitcoin 4h Elliott Wave Analysis

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Ripple, XRPUSD is bouncing quite strongly and it’s showing first evidence for a bullish reversal, but keep in mind that it hasn’t reached June 2021 lows yet, so current rally could be still as part of a three-wave correction. However, if we see a five-wave rally back 1.0 area, then we can easily start tracking bullish scenarios.

Ripple 4h Elliott Wave Analysis

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Altcoins LTC/USD and DSH/USD Elliott Wave Cycles Approaching Support

Crypto total market cap made another intraday recovery, but looking at the whole structure, we actually see a sideways consolidation, which more and more looks to be a bearish formation, so still watch out for that sell-off, while it’s below 1.88T level.

Major coins cover within 24 hours with Bitcoin 3.22%, Ethereum 8.10%, Ripple 5.26%, Litecoin 4.12% and Dash 6.26% at GMT 11:35 AM, the time of writing.

As per Elliott Wave analysis, Litecoin, LTCUSD remains nicely bearish in the 4-hour chart after we noticed a new higher degree wave (4) correction and with recent decline down to July 2021 lows and 100 level, seems like wave (5) of C is already in progress. However, wave (5) should be completed by a five-wave cycle of the lower degree, so be aware of slightly lower levels towards 90-70 area before we will see a bullish reversal.

Litecoin Elliott Wave Analysis

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DSHUSD remains bearish in the 4-hour chart as expected, ideally for the final wave 5 of an ending diagonal pattern within wave C. In ending diagonals, each wave consists of three legs (A)-(B)-(C) and we can potentially see it final stages of a five-wave cycle within that wave (C), so ideally we will see bottom and bullish reversal from around 80-60 support zone

Dash Elliott Wave Analysis

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Metals GOLD and Silver Eye South: Elliott Wave Analysis

At the same time, this means that market can stay in risk-off and more dollars gains ahead especially now when metals also turned south.

Gold is making a nice and sharp reversal from 1850 area as expected, where we see a completed ending diagonal after recent sharp reversal down. We see a minor impulse that may cause a break below the trendline support that can put much more weakness in play for wave C) of E, back to 1750 for final stages of a triangle pattern on a daily chart.

GOLD 4h Elliott Wave Analysis

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Technically GOLD tests 0.786 Fibonacci retracement level of November 2021 highs to December 2021 lows with spinning top Candlestick pattern at the top and slides from there, at the same time daily MACD generates sell signal means we may see more weakness ahead.

GOLD Daily Technical Analysis

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Silver has been recovering since December but notice that recovery is made by three legs which is a corrective structure. In fact, the price fell back below 23.27 where overlap invalidated any impulsive/bullish interpretations, so we are bearish and are looking for further weakness into wave C) of five; the final leg of a higher degree ending diagonal that can boom near 20/21.

Silver 4h Elliott Wave Analysis

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Bitcoin and Ethereum Elliott Wave Cycles Point Bearish Continuation

As per coinmarketcap, major coin slid since last week with Bitcoin -21.57%, Ethereum -31.47%, Ripple – 26.71% at the time of writing GMT 11:06 AM and total crypto market cap has fallen below 2.0 T.

Looking at the USDT.Dominance chart, we can see a nice negative correlation compared to BTCUSD. So, if we consider that USDT.D chart is on the way back to highs for wave 5, then BTC could easily take out 2021 lows before a bullish reversal.

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As per Elliott Wave analysis, BTCUSD is coming even lower in the 4-hour chart after a retest of December 2021 lows, ideally within wave (C) or (3) and there can be room for more weakness, at least towards 33k-31k area for wave (C) if not even lower for wave (3) down below 30k. So, we remain bearish and we should be aware of more downside pressure while the price is below strong trendline connected from the highs.

Bitcoin 4h Elliott Wave analysis

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Ethereum, ETHUSD is coming lower in the 4-hour chart, we are still tracking wave C with room down to 2200 – 2000 area which should be completed by a five-wave cycle. Just have in mind that we will need to see strong bounce and recovery back above 3400 level to confirm a completed wave C of an A-B-C correction, otherwise still keep we can see an impulsive bearish continuation.

Ethereum 4h Elliott Wave analysis

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Macro Views

Quotable

Global Capital would never allow a comprehensive public debate about the toxic role of the financial system – which has been kept under artificial respiration since 2008, with central banks unleashing storms of helicopter money, inflating real estate markets, stocks, precious metal prices. In real life, what’s nearly inevitable next in the horizon is the bursting of a massive stock and real estate bubble all across the West.

Pepe Escobar

A major risk bid in the making…

The action we’ve seen this year in the stock market suggests a major risk-bid may be in the offing; if so, it will upset a bunch of existing expectations and key asset market trends.

From a global macro stand point, the problem continues to be an inability of the authorities to stimulate the real economy. Governments and central banks continue to create more and more credit:

… pushing real yields deeply into negative territory, believing it will help stimulate real growth.

They are wrong!

From Hoisington Investment Research:

A negative real yield points to the fact that investors or entrepreneurs cannot earn a real return sufficient to cover risks. Accordingly, the funds for physical investment will fall and productivity gains will erode which undermines growth. Attempting to counter this fact, central banks expand liquidity but the inability of firms to profitably invest causes the velocity of money to fall but the additional liquidity boosts financial assets.

Now despite being wrong about how to stimulate the real economy, the authorities—the US Fed—sure do know how to stimulate financial assets and creating what Jeremy Grantham calls the biggest multi-asset bubble in history.

This time last year it looked like we might have a standard bubble with resulting standard pain for the economy. But during the year, the bubble advanced to the category of superbubble, one of only three in modern times in U.S. equities, and the potential pain has increased accordingly. Even more dangerously for all of us, the equity bubble, which last year was already accompanied by extreme low interest rates and high bond prices, has now been joined by a bubble in housing and an incipient bubble in commodities.

For those with access to capital, it’s been a great run. But for the average guy person, who relies on his labor for income, it’s been pretty ugly for a while. Shutting down the global economy, for a pandemic with a 99.7% survival rate, hasn’t helped.

So why is this distorted game likely to change? Inflation!

Even though unemployment fell in 2021, consumers became more alarmed by the drop in real wages according to surveys. The faster inflation shredded the budgets of about 75% of our households. In November, the level of real per capita disposable income equaled the year ago level which was also the lowest level since March of 2020. Consistently, The University of Michigan indicates consumer sentiment in the fourth quarter was worse than during the height of the 2020 pandemic and at the levels of the beginning of the very deep 2008-09 recession.

Hoisington Investment Research

Mr. Consumer is pulling in his horns and corporate earnings are being hammered by rising prices and supply chain problems.

the diffusion index for prices paid by manufacturers remained at its highest level on record. A diffusion index measures change, not levels, and it means that costs are still rising – no surprise with oil at the highest level in seven years.

Manufacturing, to be sure, is just 12% of the US economy; services represent 78%. And prices paid by service providers as of December were rising at the fastest rate since the Institute for Supply Management’s records bean in 1997.

So, we are seeing a slowdown in economies globally—China is suffering a popping of its own real estate bubble (and impact of debt overhang) and doesn’t look likely to be a driver of global growth anytime soon. Not good for corporate earnings.

Thus, E of P/E (Price-to-earnings) ratio for stocks is falling, while the cost of capital is rising—as central banks tighten credit to stem inflation; it should be no surprise if P follows E; i.e., stock prices go lower from here. And if stocks do go lower, it’s a negative feed-back loop into the real economy for the first time since 2020 and will exacerbate the pressures from inflation on the economy.

We now run the risk of reality to be self-reinforcing to the downside for stocks and the economy.

The plunge in stocks on Thursday had a feeling of slight panic. We suspect this may be only the beginning of something big.

So, if a major risk bid is shaping up, the best bets are as follows:

  • Short Stocks
  • Long the US dollar and Japanese yen (usually gets a bid on capital repatriation back into the Japanese government bond market.
  • Long bonds (capital flow on a run out of risk assets, at least near-term, will likely trump central bank interest rate expectations)
  • Short commodities

We provide specific Elliott Wave targets for all the asset classes mentioned above for Members of our service.

Take care. And be careful out there.

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Regards,

Gregor and Team…

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Bitcoin and Ethereum Elliott Wave Cycles Eye Down

We see stocks in risk-off mode at the same time which makes US currency very attractive, so those who are selling stocks will also look to go out of risky and volatile assets like cryptocurrencies. That been said, we think that under these circumstances, there is room for more potential weakness on major BTC and ETH coins as described lower

Bitcoin, BTCUSD is coming even lower in the 4-hour chart, breaking even below December 2021 lows, ideally within wave (C) or (3) and there can be room for more weakness, at least towards 39k-37k area for wave ©. So, we remain bearish and we should be aware of more downside pressure while the price is below strong trendline connected from the highs and below 52200 invalidation level.

BTCUSD 4h Elliott Wave Analysis

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Ethereum, ETHUSD is also coming down, below December 2021 lows as expected into wave C with room down to 2800 area or slightly lower; a leg that should be completed by a five-wave cycle. Just have in mind that we will need to see strong bounce and recovery back above 3600 level to confirm a completed wave C of an A-B-C correction, but for now we see current recovery as a sub wave (4).

ETHUSD 4h Elliott Wave Analysis

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USD/CAD and USD/JPY Elliott Wave Cycles Point Lower

Notice that pair broke the trendline support of a base channel last week which normally occurs within wave three of an impulse, thus we think there can be more weakness coming, firstly to around 1.2450 and then possibly even to 1.2250-1.23 area. The short-term invalidation level is now at 1.2625; as long it holds the bearish impulse is expected to resume lower within wave 3/C.

USDCAD 4h Elliott Wave Analysis

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USDJPY has been very bullish through 2021 but now it may face a limited upside since we are seeing a fifth wave trying to complete wave c of a higher degree wave d) that can belong to a multi-year triangle. However, calling a top can be too soon since we are not seeing a completed five waves down from recent high when looking at the 4h chart, but so far it looks promising with recent extensions below the base channel support line.

If pair will rise back above 115.05 then market may stay sideways for a big triangle.

USDJPY 4h Elliott Wave Analysis

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Ripple and Bitcoin Cash Elliott Wave Cycles Point Recovery Ahead

We can see a new intraday decline following stock market sell-off, which can still belong to a higher degree wave »iv« correction within downtrend according to our primary count.

However, we are also still observing a secondary count, where Crypto market could be unfolding a bigger three-wave A-B-C corrective recovery, where current drop could be a pullback in wave B.

XRPUSD remains nicely bearish in the 4-hour chart as expected and we can see a quite clear impulsive decline, so bears are probably still in control, just be aware of a potential A-B-C pullback before the downtrend resumes, as five waves down can be seen. Ideal resistance is in the 0.80 – 086 area, but keep in mind that we remain bearish as long as the price is below 1.02 invalidation level.

Ripple 4h Elliott Wave Analysis

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BCHUSD is making quite big intraday recovery, so wave 5 can be completed, but notice that it didn’t break below previous December 2021 spike low, so for now we are just observing a minimum three-wave A-B-C rally which can still belong to a higher degree correction within downtrend, while the price is below 544 level.

Bitcoin Cash 4h Elliott Wave Analysis

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S&P500 and German DAX Elliott Wave Cycles Point Correction

As I noted yesterday, he was careful with his “policy outlook” and definitely he was not that hawkish as before. However, the CPI numbers will be an important indicator for next direction of the USD.

The S&P500 has made a sharp reversal down from 4821 which can be part of a higher degree correction, but the question is if the correction will be deeper and lower to around 4500 or rather slow and sideways, like a triangle or flat. In either case, it’s important to keep an eye on a current rise from 4580 which for now is still in three-wave so it can be limited recovery at around 618% Fib. Keep in mind that for a bullish sequence we need impulse up to around 4780/4800. Long story short; the market is in a neutral zone; we need more data to confirm the next direction. US CPI can be the catalyst.

S&P500 4h Elliott Wave analysis

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DAX is turning down in the 4-hour chart after a three-wave A)-B)-C) corrective rally, so seems like we may see a deeper decline now, at least in three waves A)-B)-C), maybe even back to the lower side of a range, ideally as big daily triangle or flat correction.

DAX 4h Elliott Wave analysis

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USD Index and Cable Eye Higher: Elliott Wave Analysis

We, however, are tracking a big triangle (scenario 1) meaning that the market can still see limited upside after sub wave D hits resistance, possibly near 97.00, which may occur after a five-wave rally is completed on the 4h time frame.

Keep in mind that we are still missing a new high for a fifth wave to complete a sequence from October low, so be aware of another leg up after the current corrective sideways consolidation within wave 4 that can be coming to an end. Rise above 96.45 makes a room for a new high.

USD Index 4h Elliott Wave Analysis

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GBPUSD, Cable is making a bigger intraday recovery with the current price at new high so move from December 18th is becoming even more extended meaning that market can be making an impulse from the low, therefore it’s a chance that pair is making a major turning point at 1.3150 area. However, pullbacks will show up, ideally now into a red wave 4) that can find support this week around 1.3430-1.3490 area.

GBPUSD 4h Elliott Wave Analysis

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Shiba Inu May fall below 0.00003 Level: Elliott Wave Analysis

So, we believe it’s just a pullback that can be also slightly bigger one before we will see more weakness so keep in mind that any intraday rally could be limited.

Bitcoin Dominance is trading at all-time lows against ALT.Dominance and we see BTC.D/OTHERS.D ratio chart trading in 5th wave. Of course, it may stay down for a while, but it’s important to warn about that we are in a bear market and that’s why BTC is currently losing a little bit more than ALTcoins.

However, we have to keep in mind that sooner or later BTC will start dominating again, so most of ALTcoins will have hard times to wake up. We believe that once Crypto market find support/bottom in general, BTC will be the best investment again. ALTcoins will follow BTC rally later.

Bitcoin Dominance 4h Elliott Wave analysis

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SHIBUSD is still moving nicely lower within a complex (W)-(X)-(Y) corrective decline as expected and if we consider another 60% decline like in wave (Y), then final wave C of (Y) could ideally stop at the former wave (4) around 0.00002x support zone.

Shiba Inu 4h Elliott Wave Analysis

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GOLD and Silver Elliott Wave Cycles Approach Resistance

Gold broke above 1800 round figure and extended gains towards 1830 with an extended five-wave substructure, meaning more upside can occur after the current fourth wave set back which should stay above 1805, otherwise the intraday uptrend will be invalidated. Silver is also showing a very similar pattern with price now 23.04 support.

Gold is in a recovery mode on 4h chart, away from 1751, but only in three waves that we see as wave B) moving towards 1820-1848 resistance. Therefore, we should be aware of another leg down, into wave C) of E to complete a higher degree triangle. Break below trendline support near 1808 will put weakness in play.

GOLD 4h Elliott Wave Analysis

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Silver came sharply down in November, from 25.40 resistance area, so it appears that metal is in a higher degree three-wave drop. Ideally, it will be an A)-B)-C) the decline that belongs to the fifth wave of an ending diagonal, so be aware of more weakness after current rally within wave B) that is already back at 23.25-23.70 resistance area. Drop below 22.14 will make room for a final leg to 21-20 area where we will expect a price stabilization; ideally at the start of 2022.

Silver 4h Elliott Wave Analysis

 

Ethereum and Dash coin Eye Downside: Elliott Wave Analysis

ETH is currently in the neutral zone still but it’s trying to form a breakout now, below the red trendline support on 4h chart which can make a room for a drop to 3200-3000 area. Break below massive 3k level could actually suggest that Ethereum is in wave C of a flat or a triangle in four.

Ethereum 4h Elliott Wave Analysis

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DSHUSD is making a bigger intraday recovery in the 4-hour chart, but we still see it as an (A)-(B)-(C) correction within wave 4, ideally as part of a bigger daily ending diagonal pattern that can send the price back to June lows for the final wave 5 of C before bulls show up again. Nice projected support is around 100 level that can come in play fast, once the trendline support is broken.

Dash coin 4h Elliott Wave Analysis

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Currency Pairs USD/JPY and EUR/JPY Elliott Wave cycles Point Resistance

As such, there is still a chance for a reversal, ideally, after the current fifth wave that is moving into 114.50-114.80 resistance area.

As per Elliott Wave analysis, USDJPY has completed the 5th wave as an ending diagonal (wedge) pattern and that weakness will resume towards much lower prices as a drop from 115.52 unfolded as an impulse. Ideally, that was wave A)/1), so more weakness is coming after an A-B-C rally within wave B)/2), which can be now approaching important resistance here around 61,8%-78,6% Fibonacci retracement and 114.50 level, from where we should be aware of another decline for wave C)/3).

USD/JPY 4h Elliott Wave Analysis

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EURJPY is still in sideways consolidation in the 4-hour chart, which still looks like wave 4 correction, but we see 130.00 psychological level as key resistance, from where we have to be aware of another sell-off for wave 5, especially if we consider bearish looking EURUSD and resistance on USDJPY.

EUR/JPY 4h Elliott Wave Analysis

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EUR/JPY and CAD/JPY Currency Pairs Elliott Wave Cycles Point Downside

However, after recent bounce seems like EURJPY is forming a bearish triangle pattern, so we may see a sideways consolidation, but still be aware of a bearish continuation for the final wave 5 of C) before it finds the support.

EUR/JPY 4h Elliott Wave Analysis

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CADJPY is turning sharply down from the highs on a daily chart, which suggests that a five-wave cycle is completed. So, we are now tracking a three-wave A-B-C correction that can send the price at least back to 38,2% Fibonacci retracement and to the former wave 4 support. Currently seems to be wave B still in progress and once it’s fully finished, be aware of another wave C decline.

CAD/JPY Daily Elliott Wave Analysis

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