Weekly Waves: EUR/USD, Bitcoin and gas
(Chris Svorcik – Elite CurrenSea)
- EUR/USD made a strong bullish bounce at the 78.6% Fibonacci support which confirms the end of the wave B (pink) and the start of the wave C (pink).
- Bitcoin (BTC/USD) is building a descending wedge chart pattern, which usually breaks bearishly.
- NGAS made a bearish bounce at the 50% Fibonacci level, which is probably a bearish wave 4 (yellow).
EUR/USD bullish bounce at the 78.6% Fib support
- The EUR/USD seems to have completed an ABC (yellow) within a wave B (pink).
- There was a strong bullish bounce at the 78.6% Fibonacci support which confirms the end of the wave B (pink) and the start of the wave C (pink).
- Price action needs to now break above the resistance (orange) lines to confirm the continuation within the wave C (pink).
- The ABC (pink) is expected to complete a wave 4 (gray).
- A break below the 78.6% Fibonacci level indicates either a downtrend or complex correction within the wave B (pink).
Bitcoin builds descending wedge pattern
Bitcoin (BTC/USD) is building a descending wedge chart pattern, which usually breaks bearishly:
- The BTC/USD has been testing the support zone (green) multiple times.
- So far, BTC/USD was unable to break below the support levels.
- But price action was hardly able to move up because it faced strong resistance with every bullish attempt.
- The flat bottom but descending resistance line indicates a descending wedge pattern.
- A bullish breakout (blue arrow) could indicate an ABC (yellow) within the wave 4’ (pink).
- A bearish breakout (red arrows) indicates an immediate downtrend within the wave 3 (orange) of wave 5 (pink).
- The bearish targets are at $15k, and $12.5k.
Natural gas bearish bounce at 50% Fib resistance
NGAS made a bearish bounce at the 50% Fibonacci level, which is probably a wave 4 (yellow):
- The bearish bounce could indicate a 5 wave (yellow) pattern within a wave C or wave 3 (pink).
- A bearish breakout (red arrows) could occur below the last remaining support line (green).
- The main targets are $6, $5.50, $5.30 and $5.
- A break below the $5 increases the chance that price action is in a bearish wave 3 (pink) rather than a wave C (pink).
- A bullish breakout (blue arrow) above the resistance (orange) could indicate an expanded wave 4.
- A break above the 50% Fib places the bearish Elliott Wave analysis on hold.
The analysis has been done with the indicators and template from the SWAT method simple wave analysis and trading. For more daily technical and wave analysis and updates, sign-up to our newsletter
USD/JPY outlook: Japanese authorities may intervene as USD/JPY rose to 32-year high
(Slobodan Drvenica – Windsor Brokers)
The USDJPY is consolidating under new 32-year high (148.85), following strong bullish acceleration last Friday, which broke and closed above key barrier at 147.68 (1998 peak).
The pair advanced 2.3% last week (the biggest weekly rally since the last week of May) extending steep ascend into ninth straight week.
The dollar remains well supported on signs that the Fed is expected to keep its strong hawkish stance and possibly increase the pace of policy tightening in coming months, as well as safe-haven flows on growing economic and geopolitical uncertainty.
Bulls eye targets at 149.32/150.00 (Fibo 161.8% projection of the upleg from Sep 22 trough (140.36 / psychological), where strong headwinds are expected, as daily and weekly studies are strongly overbought and
Japanese authorities may intervene again to support sharply falling yen.
According to the limited reaction on the last intervention (Sep 22) and no substantial changes in fundamentals expected, potential intervention would likely provide better levels to re-enter strongly bullish market.
Res: 148.85; 149.32; 150.00; 151.43.
Sup: 148.42; 147.68; 147.07; 146.22.