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Showing posts with label DX. Show all posts
Showing posts with label DX. Show all posts

Sunday, November 23, 2014

Elliott Wave Analysis of EURUSD

Do you remember the cheer leading for the EURUSD back in April - May 2014? All I read was EURUSD is going to 150 160, sell the US$ etc .

Back then I was looking for a major peak for EURUSD I posted a couple of charts on Stocktwits.

See here: http://charts.stocktwits.com/production/original_22387342.PNG?1398488058

Sentiment was really bearish for the US$, but the complete opposite pattern was also setting up for the US$ (aka DX). Its not easy looking to fade the majority at major turns, but this is where Elliotticians have a distinct advantage.

Fast forward to today, we now have the same setup for the US$, sentiment has completely reversed against the EURUSD, In May 2014 everyone loved EURUSD, but now everyone hates it.Yet we are actually looking for a major low for EURUSD, we feel there is a high reward and once again we find ourselves looking to fade the crowd, just like we did at the May 2014 highs.

There is a strong reward trade setting up for those that are looking to fade the majority.

A 5 wave advance appears to be close to ending on the DX, so subsequently we see a 5 wave looking decline on EURUSD, we can clearly see a large RSI divergence also setting up for both markets.

If we are correct (we think we are) then expect a larger reversal, a turn that the majority will miss, just like they missed in May 2014.

Target is 132-134, that's going to be a great trade for those on the right side, another way to trade the move is to sell USDCHF, either way we think a larger move lower is setting in for the US$

So the trade will be to sell DX (aka USD) and USDCHF, buy EURUSD and GOLD

Saturday, March 22, 2014

Elliott Wave Analysis of DX (aka US$) & EURUSD

Its been a while since i updated the blog, although you can still check out my thoughts on Twitter and Stock Twits.

Or just look right and you can read those twits, i am still active, although i have not really had the desire to write an article, especially about the US markets as there are not doing much these days.


I posted this DX chart on the 13th march 2014 http://stocktwits.com/message/20965942

It appears to have finally broke out to the upside as i wanted to see, the break out was impressive, which came off the back of the FOMC, but whilst the move was strong its still lacking an inertial 5 wave advance, so more upside is needed from the bulls.

Staying above 79.80 supports more upside, so upside from USDCHF should be seen (basically USDCHF and the DX are the same pattern) and downside for EURUSD as that pair is inverted to DX and USDCHF.

So as the DX moves higher we should see EURUSD move lower.


I initially posted the setup we have been following on 2nd March 2014 http://stocktwits.com/message/20545671

Well we got the spike and potential reversal i wanted to see, but like the DX and USDCHF markets, we are working the idea of a possible small 5 wave decline.

Its important for us to see that initial 5 wave move, as until we see that, we cant be sure of a potential trend change.

Staying below 138.50 should see more downside, both the DX and EURUSD are lacking a few gyrations to make an initial 5 wave move.

If we do see the 5 wave pattern as we expect, that will be a great clue to suggest a trend reversal, then we can look to sell corrective rallies on EURUSD, and buy dips on the DX and USDCHF.

The potential for the US$ to rally is HUGE, and IMO is worth following, sentiment is against a US$ rally and that's usually the time the US$ puts in a low when the world is looking for it to crash.

Trade safe

Friday, January 25, 2013

Elliott Wave Analysis of DX (US$)

No matter how i try to label it all seems like some variation of a triangle, although most traders are looking at the obvious triangle as shown in this chart

Now i would tend to agree the obvious pattern appears to be a triangle, however the obvious may not be so obvious

When the market is so one sided, that's a time i get very cautious about following the herd, it seems virtually everyone is looking lower in the US$ and higher in EURUSD

I cant go against that sentiment as patterns and price suggest lower, but there is a way that could fool the majority as its something many will probably not be watching, as the obvious might just be too obvious

Alternative Wave Count

Whilst may are looking lower, it might actually be a B wave triangle and push higher, its something that i am considering as the US$ down, EURUSD up is pretty much embedded into forex traders, yet the biggest surprises usually happen when so many are one sided, such as now.

Although overall its bearish the US$ (DX) we could see many traders wrong footed if the US$ got a surprise bid

Saturday, November 24, 2012

Elliott Wave Analysis of the DX (US$)

The bulls appear to have failed in their quest for a move higher, IMO that looks like a 3 wave advance from the Sept 2012 lows, and we clearly saw a strong bid come into the market on Friday whilst the US$ got smashed lower

Markets that are highly correlated such as EURUSD and USDCHF were the clear winners, although the initial start is not clear, the strong break down is the biggest clue for bullish traders in risk, and anyone selling risk markets IMO should respect this breakdown in the US$

Now for those that have been reading my tweets etc maybe remember i was bearish on the US$ as long as the DX stayed under the 80.50, will the bulls recaptured that area, but over the past few weeks, they have failed to capitalize on that edge they got, with Fridays breakdown below 80.50, if that continues then expect strong moves higher in risk markets

So Gold, Silver, Oil,  EURUSD and European and US stocks higher


If that's a theme we can use over the coming weeks its a massive edge we can use and make this market an easier market than it has been, as we have seen come crazy correlations and many markets breakdown

But for those that are watching, the USDCAD i think kicked back in with US stocks as we clearly saw the precious metals break higher as the DX puked lower

If that continues then its a clear trade

Friday, September 7, 2012

Elliott Wave Analysis of DX aka US$

The reversal from the 25th Jul highs is what traders need to be focused on atm, currently its a 7 wave decline, we are also seeing 7 wave advance in the EURUSD

Whats so special about a 7 wave move, well in Elliott Wave terms that's what is called a correction

3,7 or 11 waves constituents a correction, so its important for both the bears and bulls to monitor the number of waves and structure from here

If the US$ is setting up for a strong reversal, it will have big implications on the risk markets, likewise if the US$ collapses and it breaks strong support between 80.50-80.20 then the US$ bulls are going to be in trouble

The direction from here is key for both sides and if the US$ pukes hard, my best guess is that anything and everything gets bought and a "full on" risk buying sprees and the carry trade kicks back in and risk markets get bid up


If the US$ is trying to base (EURUSD making a high) and it remains above support at 80.50 -80.20, and reverses, IMO it will have a major affect on the risk markets as $$$ runs back into the safety of the US$

So its important to stay vigilant from both angles

A measured move at 80.72 is sitting underneath, with the look of a potential ending diagonal (the same ideas on EURUSD) things could get very interesting shortly