Technical Analysis and a few charts to ponder

pound is weak... interupption of gold price makes it dipping slow ?

The pound breakout is weaker than the other dollar crosses today. The daily range king normally dominates these breakouts but has been limited so far to 1.9640 while the Eur/Usd, Usd/Chf & Usd/jpy have kept trucking. This is certainly due to the strengthening yen and all of the positions in the Gbp/Jpy which has been in a range for 2 days. I am currently holding my pound long in the belief the the dollar weakness prressure will take the pair to the 1.9670/80 area today.

While the GBP/USD move was limited by the new Yen strenght on Friday, I see the next upside resistance for the GBP/USD being the 1.9750 area. I show minor support at 1.9600 with 1.9550 just below.

Recently, about the worst pair to trade has been the GBP/USD.
The combination of yen strength and dollar weakness has left the pound in a range funk. All of this has been driven by the inverse effect of the GBP/JPY and the USD weakness. I have been focused on the USD/CHF and the EUR/USD. The USD/JPY has been good too as far as dollar crosses go. Last but not least the GBP/JPY has been a goldmine for those who are short.
I will be looking for some clarity in the carry trader sentiment before returning to trading the GBP/USD.

We'll the full scaled carry trade unwind panic is in full swing. The question of the day, week and maybe the quarter is already "where is the bottom".

Here is a look at the current 4hr pound chart and the assualt of the Jan, 5th Low

Here is a look at some of my Usd/Jpy targets.
First being 115.00 with 112.00 below.
I will be looking for a solid reaction upon a touch of 115.00

Here is my old daily chart on the Gbp/Jpy.
As you can see we blew out the top of the bull channel in December and everyone in both hemispheres was long. The break of the 230.00 trendline and the fall back into the trading channel along with a whole new public awareness gave us this fun little panic sell. Soo many of us have been saying this had to happen but only a few were will to short this monster until it became obvious. Once it did become obvious, everyone wanted to be short and the longs ran for "cover".

So, where is the bottom? Obviously, the carry trade honey pot lovers will be back in this thing as soon it finds a stable price level. No one but the steely eyed quick trigger short term traders will want to be first in. However as soon as the yen finds "its happy place", It should be a nice long

Currently we have paused at the late november lows but I dont see it stopping just yet. I would not at all be surprised to see as low as the 210 area eventually. However, since the ascent has been so strong we dont have alot of "old numbers" and consolodation areas to play off of. In this type of instance I would expect to see technician looking to variations of fibonacci. I personally will be looking to the Usd/Jpy and Gbp/Usd pairs and their corrospending charts for technical clues.

It's been awhile since I have added any charts but this one is a text book elliot count within a channel. Time to buy?

A large view of support and resistance and fib confluence on D1, what do you think??

Looks like the pound was its normal overexhuberant self Alex. It overshot the expected levels to your 50% retrace and then rebounded with a vengence.

While the pound completed its bear wave count first, the euro hit the number hard and fast on Friday morning. Of course with the rapid fall of the Euro/USD there were fundemental explainations and rationalizations a plenty. There was everything from a quite harmless redundant statement regarding China and US monetary policy by Trichet, to a stated shift in strategy from a major US bond market player in Bill Gross at Pimco. The statement by Gross certainly got the most traction from the media.

With all of that being said, the Euro/USD is still displaying text book techinical behavior coming into this week. And now that the E/U has completed the 5th wave within its bear channel, technically we are at we find ourselves looking for some insight.
Here are 3 looks at the e/u. Weekly, Daily and the 4hr.

Technically, there is a lot to consider here. I like to start with the big picture first. Here is the weekly chart encompassing 1 1/2 years. While we just completely the 5th wave on the 4hr chart bear channel ending in a retest of the December 2004 high, we have also just completed a 3/8's retrace of the 5th wave of the euro rally from the 1.16 low of november 05':

a closer look on the weekly bringing the fibonacci levels into view:

Now the current 4hr view showing the completed 5th wave of the bear channel off of the 1.3680 retest of the 04 year end high:

After looking at the above 3 charts, Here is what I see:

1. We just tested the December 04 high of 1.3680.

2. We completed this test after a perfect 5 count wave.

3. Since the retest failure of 1.3680 we have completed a textbook smaller 5 wave channel retrace to the 3/8's retrace of larger 5th wave from 128.50 which perfect coincides with the 1.3350 high of the 3rd wave completed on December 4th 2006.

So here we are, major up wave - complete. And, standard retrace - complete. Wave aside. we are still in a big picture Euro uptrend.

The double top upon a completed wave is a very enticing play for USD bulls who see some serious counter trend prifit potential.

Now that all of these waves are completed, I await further clues.

On the daily chart we can certainly consider the 5/8's retrace to 1.3180 very possible. If the Euro/USD breaks above 1.3550 on the upside I expect a successful assualt on the 1.3680 double top.


FXO

Very nice analysis. Concise and to the point. Thank you for presenting your views. Never have been a big fan of waves (most likely due to my ignorance of the subject and lack of incentive to delve further into the subject - I think that's called laziness -- Ha!) But, your excellent charts sure makes one to think about exploring the subject further.

Thank you again for the excellent presentation...