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USDSGD Trade from 5/23 Live Trading Room

USDSGD 1 Hour Elliott Wave Chart on May 23rd

We sold the pair at 1.3899 and initially we set a target profit of 1.378. Later we adjusted the target to 1.374 due to structural change. The target was hit in June 15 for a +160 pips profit. Below is the 1 hour chart used for the trade:
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DAX Elliott Wave Analysis: Rally expected

Short term DAX Elliott Wave view suggests the rally from 5/18 is unfolding as a double three Elliott Wave structure. Minute wave ((w)) ended at 12879.5 and Minute wave ((x)) pullback ended at 12617. Internal of Minute wave ((x)) subdivided as an expanded flat Elliott Wave structure where Minutte wave (a) ended at 12633.5, Minutte wave (b) ended at 12922.5 and Minutte wave (c) of ((x)) ended at 12617. DAX has broken above Minutte wave (b) on 6/14, adding conviction that the next leg higher has started. Up from 12617, the rally is unfolding as a zigzag Elliott Wave structure where Minutte wave (a) ended at 12948.5 and Minutte wave (b) is proposed complete at 12701.5. Near term, while pullbacks stay above 12701.5, and more importantly above 12617, expect Index to extend higher. We do not like selling the Index.

DAX 1 Hour Elliott Wave Chart

EURJPY Elliott Wave Analysis: Bullish against 123.6

Short term EURJPY Elliott Wave view suggests the decline to 122.35 on 6/15 low ended Intermediate wave (X). Rally from there is unfolding as a double three Elliott Wave structure where Minute wave ((w)) ended at 124.46 and Minute wave ((x)) ended at 123.62. Minute wave ((y)) is in progress and also unfolding as a double three. Near term focus is on 125.42 – 125.68 to complete Minutte wave (w) of ((y)). Afterwards, pair should pullback in Minutte wave (x) of ((y)) in 3, 7, or 11 swing before turning higher again, provided pivot at 123.6 low stays intact. We don’t like selling the pair.

EURJPY 1 Hour Elliott Wave Chart

Attached Image (click to enlarge)

Attached Image (click to enlarge)

IBB Forecasting the Rally & Buying the Dips

IBB ( iShares NASDAQ Biotechnology Index ETF ) tracks the performance of a market-cap-weighted index of biotechnology and pharmaceutical companies listed on the NASDAQ. In this Technical Blog we’re going to take a quick look at the past Elliott Wave charts of IBB and we’re going to take a look at the price structures , count the swings and explain the forecast.
Early this year, the instrument made new highs and it was showing 5 swings from last year low which is considered as a bullish incomplete sequence. That’s why we were looking to buy the 6th swing pullback in 3 , 7 or 11 looking for a new leg to the upside or at least 3 waves bounce.
IBB Daily Swings 05/09/2017

The first 3 waves pullback from March peak only gave a reaction higher, then IBB turned lower looking to do the Double Three Correction toward equal legs area 282.95 – 278.66 where buyers were expected to show up to support the Index.
IBB Daily Chart 05/31/2017

On 05/31, IBB bounced perfectly from 100% of the move from 03/02 peak and then the instrument was expected to resume to the upside. The bounce higher allowed buyers to protect their position and get risk free.
IBB 4H Chart 06/02/2017

Finally, the index managed to make new highs above March peak and we were still calling for more extension to the upside. The first short term target area was achieved at 321 and pullbacks from there should remain supported in 3 , 7 or 11 swings while pivot at 290 low keeps holding.
IBB 4H Chart 06/22/2017


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Hang Seng: Incomplete Elliott Wave Sequence

Hello fellow traders. In this technical blog we’re going to present the past Elliott Wave charts of Hang Seng ( $HSI-HKG ) published in members area of www.elliottwave-forecast.com . As our members know, we were pointing out that Hang Seng is having incomplete bullish swings sequences in the cycles from the February 12th and December 30th 2016 lows. We advised members to avoid selling the index and keep buying the dips in 3,7,11 swings. In further text we’re going to take a look at our past forecasts, count the swings and see how we guided our members through this instrument.
HANG SENG HSI-HKG Daily chart 04.17.2017
At the chart below we can see 2 incomplete bullish cycles from the February’s and December’s lows. The index remains buy in a dips against the 23436.79 and 21482.4 pivots. First target area to the upside comes at 25176.21-26064.1

Now, let’s take a look at the short term structures to see where the entries were.
HANG SENG HSI-HKG 1 Hour chart 04.17.2017
The index is correcting cycle from the 23436.79 low, looking for another leg lower toward 23953.8-23633.4 ( potential buy zone) . Our forecast is calling for more strength once ((x)) pull back completes as Double three structure.

HANG SENG HSI-HKG 1 Hour chart 05.05.2017
Wave ((x)) correction reached proposed tech area at 23953.8-23633.4. The index found buyers as expected and made a nice rally from there. Wave ((x)) connector ended at 23728.56 low and we’re now having 5 waves rally from that low, labeled as wave (a) blue. Wave (b) pull back reached inner equal legs , and traders who missed entry from previous chart, can jump now in long trades at 24439.11-24288.02 area.

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EURJPY Elliott Wave Analysis Update 6.28.2017


Short term EURJPY Elliott Wave view suggests the decline to 122.35 on 6/15 low ended Intermediate wave (X). Rally from there is unfolding as an impulse Elliott Wave structure with extension where Minute wave ((i)) ended at 124.46 and Minute wave ((ii)) ended at 123.62. Minute wave ((iii)) is in progress as 5 waves. After a short term pullback in Minutte wave (iv), another leg higher still can be seen in Minutte wave (v) to finish Minute wave ((iii)). Pair should then pullback in Minute wave ((iv)) before turning higher again. We don't like selling the pair.

EURJPY 1 Hour Elliott Wave Chart

Attached Image (click to enlarge)

Attached Image (click to enlarge)

EURJPY Elliott Wave Analysis Update 6.29.2017

Short term EURJPY Elliott Wave view suggests the decline to 122.35 on 6/15 low ended Intermediate wave (X). Rally from there is unfolding as an impulse Elliott Wave structure with extension where Minute wave ((i)) ended at 124.46 and Minute wave ((ii)) ended at 123.62. Minute wave ((iii)) ended at 127.84 and Minute wave ((iv)) at 126.46. Up from there pair has broken above the wave ((iii)) peak suggesting the next leg higher in Minute wave ((v)) has started already and after a short term pullback in Minutte wave (ii) pair should see more upside. We don’t like selling the pair.

EURJPY 1 Hour Elliott Wave Chart

Attached Image (click to enlarge)

Attached Image (click to enlarge)

EURJPY Elliott Wave View: Pullback Started

Short term EURJPY Elliott Wave view suggests the decline to 122.35 on 6/15 low ended Intermediate wave (X). Rally from there is unfolding as an impulse Elliott Wave structure with extension. This 5 wave move could be a wave A of an Elliott wave zigzag structure structure, where Minute wave ((i)) ended at 124.46 and Minute wave ((ii)) ended at 123.62. Minute wave ((iii)) ended at 127.84, Minute wave ((iv)) at 126.46 and Minute wave ((v)) of A ended at yesterday’s peak 128.84. Near term, while bounces remain below there expect the pair to pull back in larger degree 3, 7, or 11 swings to correct cycle from 6/15 low before the rally resumes again. We don’t like selling the Index and expect buyers to appear after 7 or 11 swings pull back for extension higher. This view remains valid as far as pivot at 6/15 low 122.35 remains intact.

EURJPY 1 Hour Elliott Wave Chart

Attached Image (click to enlarge)

Attached Image (click to enlarge)

High Frequency Trading and Elliott wave Theory

The development of computer technology and the Internet is perhaps the most important progress that shape and characterize the 21st century. The proliferation of computer-based and algorithmic trading breed a new category of traders who trade purely based on technicals, probabilities, and statistics without the human emotional aspect. In addition, these machines trade ultra fast in seconds or even milliseconds buying and selling based on proprietary algos.
No doubt the trading environment that we face today is completely different than the one in the 1930’s when Elliott first developed his wave principle. Legitimate questions arise whether Elliott Wave Principle can be applied in today’s new trading environment. After all, if it’s considered to be common sense to expect today’s cars to be different than the one in the 1930’s, why should we assume that a trading technique from 1930 can be applied to today’s trading environment?
What is ‘High-Frequency Trading – HFT’
High-frequency trading (HFT) is a program trading platform that uses powerful computers to transact a large number of orders at very fast speeds. It uses complex algorithms to analyze multiple markets and execute orders based on market conditions. Typically, the traders with the fastest execution speeds are more profitable than traders with slower execution speeds. The reason is the decision making process, which as Humans , we do not have the mental speed or power to execute at these higher levels which are almost 100% perfection.

High Frequency Trading (HFT) is controversial and has been met with some harsh criticism. Because of the used of mathematical models and algorithms to make decisions, taking human decision and interaction out of the equation. Decisions happen in milliseconds, and this could result in big market moves without reason and also make the Market less Human.
We have seen through the years an enormous amount of charts, we do an average of 3000 charts per month and we have looked very deep into the relationship between Elliott wave Theory and this new way of trading. We have found out there is a combination and have a lot to do with the Fibos relationship which created the wave patterns, instead of the Old way which most of the time was based in the 5 wave patterns and was associate to the crowd mod or way of thinking, meaning when the crowd is happy, Market goes higher, when the Crowd is pessimist the Market start dropping. It is always hard to change, but reality jump in and we were able to understand these Computers have some sort of triggers which determined when a cycle has ended and then the pattern start. It is a very simple process which starts from the Century charts and ended in mini seconds charts. This Computer is able to related and take decisions without any mistake, which related to Humans is an amazing improve, because of that, we always told members, the Market works perfectly and what we missed as Humans is the triggers which determined in a matter of second not to keep trading aside and switch to the other.
We called this Trigger the Distribution and it is a system in which sequences need to keep in one direction not only in price, but also in momentum, we as Human failed to take these decisions faster and with higher degrees of perfections, but the Machines do get it right most of the time. High Frequency Trading relates the Time frames and cycles and then created a main trend and a series of cycles within the Main trend; they keep either buying or selling the Trend until a cycle end. Many have been making counts in the $SPX Weekly charts and have created as much as possible 5 waves counts, have made ending diagonals within ending diagonals and the Index still keep going higher. The reality is that the High Frequency Trading Machines are buying the Index until the trend fail and in order not to happen a strong move to the downside need to happen to break what we called Pivots, which is another important aspect because they keep cycles within time frames to stay alive. In Reality Elliott wave was created or developments in the Market one way in 1930, but with the High Frequency trading ruling the Market since the Computer revolution these machines have changed the way for the Market to create the Pattern and consequently the way The Elliott wave Theory is seen. We have been working into this idea for years and have been able to find a system which make a mix between the Old Elliott wave Theory and most newly version which come with the High Frequency Trading as the one ruling the Market instead of the crowd sentimental , unless the Computers goes out Trading is hard to see The Elliott wave Theory the way it was, so better adjust to the time and become a better trader and join the one that ruling.

CHF JPY Bullish Elliott Wave Sequence

In this article we will take a look at Elliott Wave structure of CHF JPY pair since the low at 4.16.2017. Move up from 4.16.2017 (107.67) to 5.25.2017 (115.16) was in 7 swings and completed wave (W). Then we saw the pair pull back from the highs. Below is the 480 minute chart presented to clients on 11th June 2017 where we were looking for pair to end the correction in 112.87 – 111.52 area and resume the rally for new highs.
CHF JPY 11 June 480 minute chart

CHF JPY 30 June 480 minute chart

Pair found buyers in the blue box between 112.87 – 111.52 and rallied to new highs as expected. With the latest rally from 112.46 – 117.78, pair is showing 5 swings up from 4.16.2017 low which is a bullish sequence and calls for more upside against 112.46 low to complete a double three Elliott wave structure. Pair has reached 0.618 – 0.764 Fibonacci extension area of (W)-(X) between 117.00 – 118.18 which is the typical area for 5th swing to end in a 7 swing sequence. Thus, we are expecting the pair to make a pull back in wave B and continue higher towards 119.95 – 121.72 area. We don’t like selling the pair in proposed wave B pull back and expect dips to find buyers in 3, 7 or 11 swings for continuation higher. If pair drops from here 116.23 – 115.94 would become next area of interest for wave B to complete and buyers to appear to start C leg higher or bounce in 3 waves at least.

EURJPY Elliott Wave View: Ending Impulse

Short term EURJPY Elliott Wave view suggests the decline to 122.35 on 6/15 low ended Intermediate wave (X). Rally from there is unfolding as an impulse Elliott Wave structure with extension. This 5 wave move could be Minor wave A of an Elliott wave zigzag structure structure, where Minute wave ((i)) ended at 124.46 and Minute wave ((ii)) ended at 123.62. Minute wave ((iii)) ended at 127.84, Minute wave ((iv)) at 126.46 and Minute wave ((v)) of A is in progress towards 129.16 - 129.7.

Near term, while pair stays above 127.41, expect further upside towards the mentioned target. Afterwards, pair should pull back in larger degree 7 or 11 swings to correct cycle from 6/15 low before the rally resumes again. We don’t like selling the Index and expect buyers to appear after 7 or 11 swings pull back for extension higher. This view remains valid as far as pivot at 6/15 low 122.35 remains intact.

EURJPY 1 Hour Elliott Wave Chart

Attached Image (click to enlarge)

Attached Image (click to enlarge)

Next Elliott Wave Target for Bitcoin BTCUSD

Bitcoin is still considered as the currency of the Dark Web, despite the fact that it was the world’s best performing currency in 2015 & 2016 and currently 1 Bitcoin (BTCUSD) is worth 2 Ounces Of Gold which is significantly important in the financial world. The digital currency continued it’s outstanding performance during this year with and it’s up +260% but Ethereum has taking over the show with +3200% rise since January.
We implemented our Elliott Wave technique in our previous articles to predict the rise of Bitcoin and how it was looking to make new all time highs. Then we explained that despite BTCUSD was reaching a Warning Stage, it would remain bullish looking for more gains to come.
Bitcoin managed to reach $3000 on 06/12 which is new milestone for Bitcoin, then it saw a 30% correction which presented another opportunity to buy it again as we mentioned that the currency is a buy into dips using the corrective sequence 3 , 7 or 11 swings to find good entries. So let’s take a look at the current chart and see the potential coming move.
BTCUSD 4H Chart 07/01/2017

BTCUSD cycle from 2015 lows remain in progress and the instrument currently still has the potential to add another leg higher toward $3250 – $3500 at minimum before ending wave III and doing a larger pullback. However we need to keep in mind that the third wave is usually the strongest one and can keep adding more extension to the upside. Consequently, it’s not recommended to sell the instrument and until the pivot at 06/15 low 2120 gives up you should keep trading with the main bullish trend.
To add more conviction to the above view we can use a correlated different type of instrument and until the crypto-currency gets approved for it’s own proper ETF, we can use The Grayscale Bitcoin Investment Trust GBTC (Its shares represent almost 1/10 of a Bitcoin).
GBTC 1H Chart 06/12/2017

GBTC is sharing the same oscillation with Bitcoin with a slightly different cycle because the instrument did a double three structure to correct the whole cycle from 2016 low. It found buyers at extreme area 366-246 and now it could have started a new bullish cycle which can take it toward $870 – $940 area and that will support the Bitcoin move higher.
What would happen if both instruments fails to make new highs ?
In that case there is no need to panic because GBTC will extend it’s correction lower and can be bough later on at the next extreme area around $200 from May peak. If BTCUSD pivot at 2120 low gives up then wave III could be already in place and it will do the double correction from June peak toward $1930 – $1725 area which will be the next area to look for buyers.
Recap
BTCUSD bullish cycle remain in progress with a potential move higher toward $3250 – $3500 area which is also supported by the same oscillation in GBTC provided that June pivot keeps holding.
The crypto-currency market was extremely volatility in the recent months and it presents a lot of risk for short term trader, that’s why you need to have a good system that can help you define your trading areas and use the proper risk management to protect your account. So if you trade or invest in CryptoCurrencies and you are interested in further structures & sequences then you can start by learning the basics of the Elliott Wave theory.

Take this opportunity and try our services 14 days for FREE to learn how to to trade forex, indices, commodities and stocks using our blue boxes and the 3, 7 or 11 swings sequence . You will get access to our current 52 instruments updated in 4 different time frames, Live Trading Room and 2 Live Analysis Session done by our Expert Analysts every day, 24-hour chat room support and much more.
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Next Elliott Wave Target for Ethereum ETHUSD

There has been a lot of headlines lately as the world’s new favorite cryptocurrency Ethereum (ETHUSD) soared +5,000% in value before the price dropped and it’s currently still up over 3,500%. Ethereum was only developed two years ago while bitcoin’s been around for almost eight years , many investors are expecting the ether token to take over in the coming months as it’s positioned to surpass bitcoin as the world’s largest cryptocurrency by market cap.
We discussed in our previous article how ETHUSD was leading the way for BTCUSD and we expected another leg higher to take place toward 315 – 365 which was achieved then surpassed as Ethereum managed to break the $400 handle before retracing lower. Let’s take a look at the 4H chart using Elliott Wave Theory to determine the next move.
ETHUSD 4H 07/01/2017

Ethereum did 7 swings sequence to end a double three correction around equal legs $228 – $193, then it started the bounce higher which allowed traders to protect their Long positions. So currently as the as the price stays above $203.9 level then ETHUSD should remain supported and extend to the upside looking for new highs or at least finish 3 waves bounce around $350 – $380.
ETHUSD Daily 07/01/2017

The pullback from 06/12 peak ended up by correcting the entire cycle from the lows, it reached the 50% of the rally around $205 and bounced from there. Consequently, the move higher has the potential to reach equal legs area $615 – $712 and even extend toward $870 it it turns out to be the 3rd wave of an impulsive move.
Recap:
Ethereum is currently the best performing currency for 2017 and it still has the potential for further gains in the second half of the year if the price manage to break above 06/12 peak. The move is expected to happen when Bitcoin starts it’s next leg higher which will drive more power to the rest of the digital market.
The crypto-currency market was extremely volatility in the recent months and it presents a lot of risk for short term trader, that’s why you need to have a good system that can help you define your trading areas and use the proper risk management to protect your account. So if you trade or invest in CryptoCurrencies and you are interested in further structures & sequences then you can start by learning the basics of the Elliott Wave theory.

Take this opportunity and try our services 14 days for FREE to learn how to to trade forex, indices, commodities and stocks using our blue boxes and the 3, 7 or 11 swings sequence . You will get access to our current 52 instruments updated in 4 different time frames, Live Trading Room and 2 Live Analysis Session done by our Expert Analysts every day, 24-hour chat room support and much more. We are also offering 2 Months for the Price of 1 as part of our 4th of July Promotion. It’s a limited time offer which will expire on Friday, 7th July 2017. Don’t delay and click here to subscribe & Get 2 Months for Price of 1 on all our monthly subscription plans. (not for current members)

USDX Elliott Wave View: Correction in progress

Short term USDX (USD Index) Elliott Wave view suggests the rally to 97.88 high on 6/20 ended Intermediate wave (X). Decline from there is unfolding as an impulse Elliott Wave structure with extension and ended at 95.47 low on 6/29. This 5 wave move could be Minor wave A of an Elliott wave zigzag structure structure, where Minute wave ((i)) ended at 97.17 and Minute wave ((ii)) ended at 97.47. Minute wave ((iii)) ended at 96.15, Minute wave ((iv)) at 96.61 and Minute wave ((v)) of A ended at 95.47.

Minor wave B bounce is currently in progress to correct cycle from 6/20 peak. The subdivision of Minor wave B is unfolding as an Elliott wave zigzag structure. Minute wave ((a)) ended at 96.33 and near term, Minute wave ((b)) pullback is in progress to correct cycle from 6/29 low in 3, 7, or 11 swing before turning higher again. While the pullback stays above pivot at 6/29 low (95.47), USDX has scope to extend higher one more leg towards 96.66 - 96.95 area to end Minor wave ((c)) of B. Afterwards, while bounces stay below pivot at 6/20 high (97.88), expect USDX to resume lower again. We don't like buying the proposed bounce.

USDX 1 Hour Elliott Wave Chart

Attached Image (click to enlarge)

Attached Image (click to enlarge)

EUR JPY Elliott Wave Trading Strategy

The video below is a short capture from the London Live Session held on June 6th . Daud presented EUR JPY Elliott Wave count and explained the trading strategy.
EUR JPY Trading strategy
As our members know, we were keep saying that EURJPY is having incomplete bullish swings sequences in the cycle from the 06/24 low. It has been the clearest structure among JPY pairs at that time. Because of bullish swings sequences we advised our members to avoid selling the pair and keep buying the dips in 3,7,11 swings. As Daud explained in the video, we were waiting for pull back to potentially make a double three correction towards toward 122.49-121.85 area before buying the pair.
The day after,on June 7th we got proposed leg lower but without reaching entry zone. We switch our short term count and labeled the pull back as Elliott Wave Flat structure ( count is presented in the video). The pair resume sideways for a next few days and eventually gave us another leg down as expected, reaching our entry zone : 122.49-121.85. EURJPY found buyers there, and as a result made nice rally making new high on June 27th. As of right now trades are approximately 650 pips in profit and risk free.
Keep in mind market is dynamic. If you’re interested in the future path of EURJPY or in any of the other 50+ instruments we cover, join us now. You can find Elliott Wave analysis in the membership areaof EWF. If not a member yet, Sign Up for Free Trial now

Video link
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GBPUSD : Buy & Sell Patterns

GBPUSD Bullish Scenario: A bullish pattern can be seen for another possible move higher but has yet to trigger buys at the BC 0.50% Fib. level. If looking to buy GBPUSD traders should be patient and wait for price to make a move lower towards the BC 0.50% Fib. retracement level at 1.2808. Waiting for price to hit the BC 0.50% Fib. retracement will offer a better risk/reward trade setup. Blue bullish pattern is invalidated if price moves below point B low of the pattern.
Bullish Pattern

GBPUSD 4 Hour Bullish Pattern

GBPUSD Bearish Scenario: A bearish pattern can be seen for another possible move lower but has yet to trigger sells. If looking to sell GBPUSD traders should be patient and wait for price to make a move higher and hit the red entry trend line and possibly terminate point 5 with a reversal lower. If price hits the red trend line traders should also be watching possible candlestick trend reversal signals (Harami, Dark Cloud, Bearish Engulfing, Shooting Star, etc.) for more confirmation.
Bearish Pattern

GBPUSD Daily Chart Bearish Pattern

GBPUSD Weekly Chart Bearish Patterns: In 2015 and 2016 this bearish pattern formed and both times has reversed and hit targets. Only time will tell if 2017 bearish pattern will trigger and reverse lower to hit target.

Of course, like any strategy/technique, there will be times when the strategy/technique fails so proper money/risk management should always be used on every trade. Hope you enjoyed this article and follow me on Twitter for updates and questions> @AidanFX or chat me on Skype > EWF Aidan Chan
*** Always use proper risk/money management according to your account size ***
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USDX Elliott Wave Analysis 7.6.2017

Short term USDX (USD Index) Elliott Wave view suggests the rally to 97.88 high on 6/20 ended Intermediate wave (X). Decline from there is unfolding as an impulse Elliott Wave structure with extension and ended at 95.47 low on 6/29. This 5 wave move could be Minor wave A of an Elliott wave zigzag structure structure, where Minute wave ((i)) ended at 97.17 and Minute wave ((ii)) ended at 97.47. Minute wave ((iii)) ended at 96.15, Minute wave ((iv)) at 96.61 and Minute wave ((v)) of A ended at 95.47.

Minor wave B bounce is currently in progress to correct cycle from 6/20 peak. Revised view suggests the subdivision of Minor wave B is unfolding as an Elliott wave double three structure. Minute wave ((w)) ended at 96.51 and near term, Minute wave ((x)) pullback is in progress to correct cycle from 6/29 low in 3, 7, or 11 swing before turning higher again. While the pullback stays above pivot at 6/29 low (95.47), USDX has scope to extend higher one more leg towards 96.67 – 97.31 area to end Minute wave ((y)) of B. Afterwards, while bounces stay below pivot at 6/20 high (97.88), expect USDX to resume lower again. We don’t like buying the proposed bounce.

USDX 1 Hour Elliott Wave Chart

Attached Image (click to enlarge)

Attached Image (click to enlarge)

USDCAD Forecast and BOC Meeting Next Week

Bank of Canada will have a meeting on July 12 to decide the interest rate. USDCAD has declined due to recent comments made by top Bank of Canada officials which seem to suggest that interest rates could be raised soon. The market in fact is pricing in an 82 percent chance of a rate hike next week. In a CNBC interview last week, Bank of Canada Governor Stephen Poloz said that the two interest rate cuts by Bank of Canada in 2015 have done their jobs in shielding Canadian economy from the steep fall in the price of oil. He also added that the central bank needs to consider its options as excess capacity in the economy is used up.
Mr. Poloz reiterated his hawkish stance in a recent interview with German newspaper Handelsblatt. He said that monetary policymakers must “anticipate where the economy will be 18 or 24 months from now”. He also said inflation in Canada should be well into an uptrend by the first half of 2018. Thus normalization must begin before the price growth hits its target.
The Canadian dollar strengthened against the U.S dollar on Tuesday after his comments. The loonie touched its strongest intraday level in nine months at 1.2908. The strength in loonie is not only based on rate hike expectation alone. Recent economic data also shows Canada’s economy grew for sixth consecutive month in April. Meanwhile, business sentiment suggest companies feel more optimistic. Prices of oil, one of Canada’s major exports, also started to recover. This further adds support for the Canadian dollar.
Data from CFTC (U.S Commodity Futures Trading Commission) shows a record pace of short covering in the Canadian dollar for a fifth straight week. The June 27 COT (Commitment of Traders) report below shows non commercial’s net short positions in Canadian dollar dropped to 49,495 contracts from 82,881 a week earlier. With the net short position remains elevated at 50K, CAD remains vulnerable to short squeeze and position adjustment.

USDCAD Long Term Analysis

Daily USDCAD chart above shows pair declined sharply after reaching the peak on January 20, 2016. Pair declined from 1.4693 to 1.2461 (approximately 2200 pips) within a span of less than 4 months. The decline finally bottomed on May 3, 2016. The pair then took 1 year time from May 3, 2016 to May 5, 2017 to correct the decline in overlapping fashion, characteristic of a correction. This correction looks to be forming a bearish flag and recently pair has broken below the channel which may suggest that the correction is complete on May 5, 2017. A break below May 3, 2016 low (1.2461) will give the final confirmation that pair has started the next leg lower.
USDCAD 4 hour Elliott Wave Sequence Chart

USDCAD 4 Hour chart above shows a 5 swing bearish sequence from May 4, 2017 high. Please note that this is not the same as 5 waves impulse, but rather the number of swing count. The 5 swing sequence suggests that while the sixth swing bounce fails below swing #4 high at 1.3328, more downside can be seen in the pair.
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USDX Elliott Wave View: Downside Resumes

Short term USDX (USD Index) Elliott Wave view suggests the rally to 97.88 high on 6/20 ended Intermediate wave (X). Decline from there is unfolding as an impulse Elliott Wave structure with extension and ended at 95.47 low on 6/29. This 5 wave move could be Minor wave A of an Elliott wave zigzag structure structure, where Minute wave ((i)) ended at 97.17 and Minute wave ((ii)) ended at 97.47. Minute wave ((iii)) ended at 96.15, Minute wave ((iv)) at 96.61 and Minute wave ((v)) of A ended at 95.47.

Revised view calls for Minor wave B bounce completed at 96.52. For this view, a break below Minor wave A at 95.47 will add more validity. Until then, a double correction in Minor wave B can’t be completely ruled out. The subdivision of Minor wave B is unfolding as an Elliott wave double three structure. Minute wave ((w)) ended at 96.24, Minute wave ((x)) ended at 96.04 and Minute wave ((y)) of B ended at 96.52. Near term, while bounces stay below Minor wave B at 96.52, expect the Index to resume lower. We don’t like buying the Index.

USDX 1 Hour Elliott Wave Chart

Attached Image (click to enlarge)

Attached Image (click to enlarge)

USDJPY Elliott Wave View: Bullish Against 112.86


Short term USDJPY Elliott Wave view suggests the pullback to 111.7 low on 6/29 ended Minor wave X. Up from there, wave Y is unfolding as an Elliott wave zigzag structure where Minute wave ((a)) ended at 113.68 and Minute wave ((b)) ended at 112.86. Up from there, Minutte wave (i) of ((c)) ended at 114.3. Minutte wave (ii) of ((c)) ended at 113.96, but a break above 114.3 will add validity to the view that the next leg higher has started. Until then, a double correction in Minutte wave (ii) still can’t be ruled out before pair resumes the rally higher. Near term, while dips stay above 112.86, and more importantly as far as pivot at 111.7 low stays intact, expect pair to extend higher. We don’t like selling the pair.

USDJPY 1 Hour Elliott Wave Chart

Attached Image (click to enlarge)

Attached Image (click to enlarge)