Mercury

Still waiting patiently for the EURUSD rally (ho hum!). GBPUSD is in better shape but perhaps EURUSD put in a bullish turn late last week. It was almost a double bottom, perhaps close enough to call it so. There was a fairly strong Bullish pin bar, which was the 4th rejection off the Fib 82% (see 4 hourly chart) and this occurred with a PMD. We may get a small retrace and rally, which would be a Bullish sign for me and a breakout of the Weekly Triangle line is key.

Another 2-3 weeks have gone by and clearly my wave B (green) from the previous post was incorrect but that doesn't mean my wave A was. This is a time of significant retrace action and long consolidations across many markets, things are taking a long time to resolve; as is often the case, patience and tight stops are the order of the day. For FX the USD looks like it could have finally hit a temporary ceiling with a sharp rejection at the Fib 82% (a very late and long retrace if correct). I have NMD on the 4 hours with other oscillators over bought. EWT count works well for a wave B in A-B-C format. If this pans out then the next move (a Wave C down) will run hard and fast. In line with this EURUSD looks to have turned on Friday and GBPUSD turned a while ago but has now completed a retrace (see other threads for details). If this all pans out then we can expect a resolution to the current consolidation. If not then another leg down but for me the odds (and in fairness my long term bias) points to the former scenario, although I would not be surprised to see a small bullish retrace on DX before things really get going Short.

I am expecting a short term retrace on EURUSD and DX is showing signals of the same in reverse at present. I think there is a bit more in the current move before any retrace. The point here for me is not to spot the turn and trade it but to be prepared for it and pyramid the EURUSD Longs when the retrace ends. Trading strategy: Stop protect at BE or cash any Longs within the Fib 50% zone. Seek to identify the retrace end and turn to add to early Longs. Regarding GBPUSD it is similar, although we may only see consolidation price action here. If so I expect a further bearish move on EURGBP.

Hmm, it seems like you are asking for a tip @gautamhait, I don't do tips. There are some services around that do this if you are interested but of course they charge for the service. If you are asking how far I think Gold will go I can say that I think (think being the key word here) that Gold (and precious metals generally) will go into a long term Bull run coincident with a major bear market in stocks. How far, how long? No idea, I let the market decide that and act accordingly using my trading methodology. In the short term I think Gold/Silver will continue to rally, which is something I highlighted as a possible scenario early in this thread. My next targets are 1360 (Gold) and 1750 (Silver), although naturally the markets could fall short of that or push through a bit further. At some point I expect to see reversal indicators that will signal a bearish phase. Depending on the price action that emerges I will look to see whether this is an actual trend reversal or just a retrace of the current Bullish trend. Nothing is certain, the markets will reveal themselves in due course. However, so far Gold/Silver is playing out according to my lead long term scenario, as outlined in this thread, so I would be foolish indeed to start second guessing myself. I am focused on 2 things in precious metals markets: Maximising the opportunity my scenario is offering in a risk managed fashion - so far so good Watching out for price action that may call my lead scenario into question - nothing so far... Let me ask you what you think Gautamhait? This is supposed to be a discussion forum after all...

Just to complete the FX picture with respect to other posts, here is my take on DX. Nice hit and turn on the Fib 62%, after a 1-5 wave A down, so looks like a wave B completion (unless it is a 1-2 of a much bigger drop but time will tell). If DX does run consistently down from here then EURUSD will do the reverse. Either way I am looking at a significant bearish retrace move to set up a long term rally in due course.

It rather seems that USD price action is driving precious metals at present with USD weakness supporting rallying Gold/Silver. Looking at the technicals on both it is simply an end to my anticipated consolidation part way through the medium term rally, which presents as a Flag or Pennant. In both Gold and Silver we have seen a breakout of this consolidation and in the latter a break through over head resistance. I expect both these markets to continue to rally for a while to complete the medium term wave 1 before a more significant wave 2 bearish retrace that will set up a very long Bullish trend. My trading strategy is to go Long on the breakouts, mentioned above, watch out for any short term bearish retraces as an opportunity to buy the dip until I see signals of the wave 1 end and then exit all swing Longs (keeping only those I took at the beginning of the rally as long term trades) and wait for the retrace to compete before entering a long term Long buying campaign.

EURGBP has turned out to be my best trade at present, closely followed by GBPUSD, but the difference here is that while GBPUSD is, IMO, a retrace trade EURGBP is looking increasingly like a long term trend down. I have been patiently tracking this as the consolidation evolved, taking several "false dawn" positions but now with a potential breakout of the Weekly Triangle (close below on the weekly candle) the Bear could be on. However we need to watch out for the retest of the breakout zone and I can see 2 potential scenarios: a further bearish drop before there retest (blue arrows) a near term retest and then strong drop away there is also a chance we get both in a double retest (which would be a very strong Short signal) If we see a strong 1-2 bearish retrace of EUR and consolidation on GBP scenario 1 will emerge. If GBP retraces hard then scenario 2 will result. If both GBP and EUR reach my full retrace targets then EURGBP will drop away from the breakout zone and the long term bear will be on. I anticipate EUR will be much harder hit than GBP in the coming global recession. For now I am happy with multiple Shorts all stop protected above the Weekly Triangle consolidation line so mt strategy is to Short on failed retests of the breakout zone in a sell the rally mode.

GBP rally continues and now with EUR following suit we may anticipate a period of USD weakness. Just as with EUR I an expecting a retrace (or perhaps more likely a consolidation phase) on GBP before the next leg up and consequently the Wave A turn could be up around the 13,600 area, but as always the market will tell the tale in due course, we just have to be open to the signs and ready to take advantage of the swings as they unfold.

Well, well, a strong rally off the support zone and my low risk Longs are now stop protected at break even. We haven't seen the 1-2 retrace yet so I am waiting and watching price action on this but as soon as I see it I will look to buy the dips as I anticipate this rally going for a bit. I am not sure at this stage whether it will be a long one to the end and turn back down or a clearer A-B-C but from these ow point holding for the medium term will be my approach.

Slight adjustment to the weekly Triangle line needed for the emergence of another leg down. Price has been stopped by the short term Fib 78%, coincident with my revised weekly Triangle retest. PMD is still intact on 1 and 4 hour charts. This is a good point to take a flyer on a Long with a close stop. Alternatively wait for a small 1-2 rally and retrace. Currently the price action is consistent with a break through the Weekly Consolidation Triangle on EURGBP while GBP remains relatively strong and the rally is intact there, while GBPUSD rally remains in play my bias will be for EUR to respond likewise in due course, maybe now.

My Short trades are doing well on this pair after the wave 2 (blue) turn and 1-2 retrace offered a number of trading opportunities. A fast move back down to the lower triangle line was what I was looking for and got. This is where the market currently resides but will it plough on through of bounce off in a relief rally? Given GBP strength and my separate projections on the other 2 pairs in the Triad my lead scenarios are for a period of consolidation or a relief retrace rally before a more powerful bearish move through the lower Triangle support. Alternatively we could see a break out of the Triangle and retest rally, time will tell...

EURUSD has been much more sluggish than GBP to get going into a rally but looks to maybe be at the beginning of a move. This is not a surprise to me as the third pair in the Triad was showing GBP strength (see Triad thread). I am now expecting EUR to play catch up or at worst maintain pace with GBP, which basically means a rally on this pair. My medium term target remains 12,300 for the full retrace rally, after a minor rally off a retest of weekly triangle line with PMD on the Hourly chart.

GBPUSD has rallied away from the daily Triangle line after the sharp bullish pinbar around the Brexit deal vote in Parliament and looks set to follow my road map at least to the possible wave A completion zone (circa 13300). Given the strength of the move and other indicators I would not be surprise if the wave A carries much further than this. I have been adding to my Longs, all now stop protected at BE and will await further price action to see how the retrace will progress. I remain targeting a medium term end to the rally around the 14000 zone before the next big Bear move.

Do nothing in general @cryptotrader since Christmas but on FX IF I see the market continuing to follow my road map scenario I will look to add to my Longs on a rally away from the current ST area of congestion as in this scenario I would expect a decent rally to either a wave A or all the way to the retrace turn, which could be a good skip of points. Obviously if the reverse happens I would need to reassess. US stocks are rapidly approach the Fib 50% area, which may offer a Shorting opportunity if we see appropriate price action. Because I cannot tell yet if this is just a Wave A or the end of the relief rally I have to consider taking a position early and then wait to see how the price action progresses, otherwise I would get left behind. So for me the time to do nothing may now be coming to an end IF we see a break down in the Stocks rally and a breakout rally on EURUSD and GBPUSD.

Nothing much going on with Gold/Silver, the anticipated consolidation period continues. The competing drivers of USD and Stocks/Bonds movements may be neutralising clear direction for now but in anycase, regardless of the cause, the price action is flat. I see 2 possible routes out, both ending in an upward trajectory: a simple breakout rally that takes us up towards the big picture H&S neckline a retrace to close the price gap before that same rally My longer term projects remains unchanged, once we complete a strong wave 1 we should see a retrace wave 2 to set up a big rally, which ought to coincide with the Stocks Bear resumption. In this I am supposing that the main driver for gold becomes firmly a safe haven value store rather than a USD currency cross.

Since my last post price did indeed rally (hourly chart), however it did so in a more protracted form causing me to reposition my EWT labels. The Fib 62% was hit with a nice ST double top and then the Brexit deal vote caused a bit of ST volatility and hit the Fib 50%, spike to almost the 62% before resuming its Bearish trajectory. If we look at the big picture, taking fundamentals aside (my overriding fundamental is that the Euro has way more headwinds than the Pound and outside the EU Britain will have its destiny in its own hands, investors will like that in troubled times - of course the USD will be king so GBPUSD will go down too) that large weekly chart consolidation dominates everything. The breakout from this formation, whichever way it goes, will be key. For me, if it was going to break north it ought to have done so at the last time of asking. Now that price has been firmly repulsed back down from this resistance zone I expect at least a retest of the lower line support zone, if not an actual break out. It is quite possible we may see a failed test and rally in EWT 1-2 form within the Triangle and if this turns back down without a retest of the upper resistance zone then a breakout bear market will be on the cards. I suspect this will play out over the course of the next 3-4 months to early Summer in line with the EURUSD and GBPUSD retrace rallies and the stocks and bonds retraces. I am currently targeting early Summer (sell in May and go away type of thing) for all of this to resolve into long term moves. Therefore my strategy is to be cautious and conserve my ammo for this big event. One watch out with this pair right now, I would NOT advocate taking a position in the middle of a consolidation range, I am Short from the Triangle resistance line and stop protected at break even. The only exception would be if we get that EWT 1-2 retrace I was talking about. Otherwise I am looking at trading a breakout of support (and/or a retest) BUT watch out for the fakeout...

As with GBP (see other thread) EURUSD dropped in the run up to the Brexit vote but unlike GBP EUR did not rally much. We have a bit more this morning, which may bode well for a more sustained rally in keeping with my ongoing larger retrace rally projection. However I am a bit more cautious with the Euro as there are other real economic and political headwinds that will, in my view, pull the Euro down long term, maybe even to oblivion. I am cautiously counter trend Long but less aggressively than with GBP. Otherwise the set up is very similar to GBP and remains as I have posted previously. If price remains above the Weekly Triangle line and then rallies away we should see a clear A-B-C retrace from the current period of consolidation. However I currently do not think the Euro will rally as hard as GBP. See my EURGBP Triad thread for more on this.

Ok that was weird @cryptotrader! I was just about to post this as I got your tag... I haven't had much to say because there hasn't been much change since Christmas. Across the patch things are proceeding as expected: USD down; Oil up; Gold/Silver flat; Stocks edging up to a wave A. As a long term trader rather than a day trader, often good trading is doing nothing, just letting your positions run; managing risk and watching for the next activation zone for exit and fresh entry. For the record, I am long GBP, EUR, Oil (counter trend) and Gold (long term) and still Short Stocks (from November long term not currently) and Short EURGBP (long term). Regarding GBPUSD, I am not really interested in lasts nights Westminster pantomime, those MPs are detached from the electorate in a way that we have not see such evidence of for a long long time. The deal was bad but that was to be expected when dealing with an organisation as Byzantine as the EU. The PM is in a no win situation: take the deal on offer or come back with no deal, either way she is painted as inept by the opposition. The panto will continue up to the point the UK leaves with no deal, which will not be the disaster people are making it out to be. Anyway so much for the back drop, in such situations, when it is impossible to tell how markets will react, I stick firmly to technical analysis. For me the vote yesterday didn't cause any change in my assessment. Sure there was a bit of nonsensical intraday volatility but GBP ended up almost exactly where it started. If fact yesterdays price action took price back down through my Daily chart Triangle channel line and back up above it in a bullish pin bar form. On the Weekly Chart you can see that the days movements are not special. So the board is still set fair for the retrace to proceed in my opinion. For the avoidance of doubt, my road map arrows are indicative as the counter trend rally could trace many different routes but the basic premise of my position is that the market will sketch out a significant retrace rally, in an A-B-C form until the Bear takes hold with a vengeance. As a swing trader I will seek to take advantage of this but as a long term trader my eye is firmly fixed on identifying when the Bear resumes as this is the bigger, and safer, bet.

Looks like Silver and Gold (the latter more so) have finally hit the buffers and dropped down but how far will it go? Gold is showing a credible break through a rising, narrowing, channel and close below (see hourly chart below). Silver too but less convincingly just now. Gold has turned back from a zone of significant resistance of the Daily chart (see below). However my leading scenario is for Gold to go through a period of consolidation or a relatively shallow retrace aligned to stocks retrace rally, which would include fresh higher highs and then a much stronger retrace to set up the big rally coincidental with the big stocks Bear. In the short term I am looking for a retrace to the Fib 38%, coincident with the unclosed price gap around the 1255 area BUT it is equally possible that this gap will not be closed until the wave 2 blue retrace a few months from now. So the opportunity is to identify the next turn up and buy the dips for a short term Long trade and swing Short for the bigger retrace and then get long for the big one (or just wait for the big one...)

EURGBP has indeed turned well off the upper Triangle (Weekly Chart) resistance and put in a nice pair of 1-2 retraces before falling fairly hard on the back of EUR weakness and GBP relative strength after the flash spike low and US NFP price action. As mentioned in both my EUR and GBP posts, we would see a short term retrace on this pair coincident to a rally on EUR and retrace on GBP before the Bear gets going again. If this pans out on EURGBP then we could see a stronger rally on GBP than EUR. I am short from the 1-2 retraces and will seek to pyramid this pair when and if I see a breakout through the lower Triangle line. As mentioned before there is an unclosed gap on the Weekly chart around about the 8100 level, which is well below the Triangle support.

As mentioned in my GBPUSD post, EURUSD went Bearish after the USNFP but I held my Longs despite this as I didn't believe it was a trend change and sure enough an almost equal rally ensued. Bit of a shame it didn't quite put in a higher high before the weekend close but overall it looks to me like a 1-2 retrace is done followed by a smaller scale 1-2 preparatory to a faster wave 3 rally to come next week to finally breakout of the Triangle resistance line.

Friday was an interesting day for FX in that the EURUSD went into temporary Bearish mode post US NFP but GBP and AUD resisted this and CAD actually rallied against USD (divergence?). In the case of GBPUSD it continues to make another attempt to make a break out rally. We might see a retrace move on the hourly chart before a breakout but equally price could just continue to shoot up. Given that I think we have already seen this retrace on EURUSD and EURGBP could easily be due a relief rally I suspect we will see a retrace bearish move prior to any medium term breakout rally. My trading strategy: I am already Long and will hold these position stop protected against a short term bearish move in anticipation of a longer term rally I may add Longs on a retrace turn (maybe at a Fib 50%, as with EURUSD or possibly only the 38%) I may add Longs on a fast breakout of the overhead resistance channel line (Triangle)

I have been tracking GBPUSD along with EURUSD and the EURGBP Triad for some time now and maybe, just maybe, we have seen the bottom of the current Bearish wave. If I am right about EURGBP (see Triad post) then GBP could well rally faster and further than EUR. If we see a breakout rally then I am targeting the 14,000 level (current Fib 76/78%) as the counter trend rally wave termination area, but miles to go on that one. For now the Technical analysis is showing me Pos Mom Div on Weekly and Daily chart with a nice bounce off the lower Daily Triangle line at a point of significant LT support. The bounce was strong after the semi flash crash (I say semi because it is clearly dwarfed by the previous one) and could put in a nice pin bar reversal price action on the Weekly (still a day to go on that of course!). I have a strong 1-5 wave down, although I had that before but the thing about this is each move lower actually strengthens the Technical case for the retrace rally while key support remains intact. It is all about trial and error based on price discovery when trying to catch a turn, which is why close stops and constant monitoring for reversals against your positions are crucial. Alternatively wait for a breakout from the Triangle resistance level but watch out for retests. I would expect some ST retrace down but may not be significant so, having caught a Long on the first retrace I will be looking to buy the dips once I see the rally take hold.

Looks like my upper Weekly Chart Triangle line was drawn too aggressively initially but now looks better with the latest top, courtesy of the Flash move last night. It seems to me that GBP, having fallen harder than EUR, is now poised to rebound faster. The third leg of the Triad is certainly indicating this to me. IF my Triangle formation holds resistance then price should travel back down to the lower line and then we will see if we get a breakout. It probably will not travel straight down however and the breakout may not come until the retraces on the 2 major pairs is done with. At this point I anticipate the Euros goose will be cooked and it will fall harder and faster than GBP, for a number of fundamentals reasons previously discussed elsewhere. From a Technicals perspective I have a good pair of Triangle lines with 3+ touches (the lower line having a so-called prior pivot - the pink circle - and bisecting a price gap that is not closed at present). @elleshould enjoy that one... I also have very strong Neg Mom Div at the most recent top after an A-B-C retrace form with Stochastic over bought. On the Hourly chart we can see the flash move spike and drop, followed by a pair of 1-2 retraces and now a lower low. I will want to see 9000 broken and eventually 8900 to be fully confident that price ought to retest the lower Triangle line but anticipate a few swings between then and now as both EUR and GBP rally.

Post the flash crash dust settling it seems that the trend may now have finally reversed. Interestingly while GBP and AUD (spectacularly) dropped to new lows, EUR did not and wasn't much impacted by the Flash (note this is one reason I prefer EURUSD because, due to its size, it is less prone to such wild volatility). As with DX EURUSD seems to have posted a turn and small 1-2 retrace and is now heading north. I am Long at the retrace and now waiting to see if the upper Weekly Chart Triangle resistance line will be broken through this time. If it is then we may finally see 12,300. After that, Bombs Away!