The Elliott Wave weekly picture for EURUSD, GBPUSD, Gold, DJIA, Crude Oil

Week ending 03-04-16.

This week saw some interesting developments across the markets. Near term confirmation targets are approaching and the coming week could bring some explosive action for certain markets.
So let's try and get in position for those moves.

I will analyse five markets from a short and medium term perspective to give you an idea of the current posture of those markets and where the they are likely to move in the coming weeks given the current Elliott Wave count.

As always I will cover,
•GBP/USD.
•EUR/USD.
•CRUDE.
•GOLD.
•and the DOW JONES.

GBP/USD.

The medium term Elliott wave count views cable in a large C wave downward trend. (Insert in red)
The action over the last few months is viewed as the start of the 3rd wave down of 5 overall waves.
Cable is ranging right now in a correction but should keep moving lower and may pick up speed in the coming weeks ahead as wave 3 takes hold.

As you can see above, the immediate count has altered slightly from last week. The most likely interpretation at this moment is a contracting triangle, given the contraction in range of the price of late. The pair seems to be in oscillating around the 14200 handle in a series of three wave moves. Next week looks as if price will continue lower to complete wave 'd' of that triangle, then a rally higher to lower highs. Wave 'd' should complete around 14000, this is where the two downward legs of wave 'd' would reach equality. Watch out for a base to build around that 140 low should it occur.

 

EUR/USD

Last week I spoke about the recent high which touched the upper trend line of the contracting triangle. This week saw EUR/USD break that trend line and the previous high which invalidated the short term count.
The same scenario holds, but it has been extended to allow for that triangle to continue for a few more weeks.

That larger trend is still down and should reassert its self in due course, with a possible long-term target at the 8500 handle.

The shorter term action broke the critical high, as i mentioned above which altered the wave count slightly. Price did poke down through the 20 and 50 period moving average, indicating a slowing of upward momentum. I am still looking for a high to come soon which will develop into a wave 'd' down.

Notice the blue line in the longterm chart. This high marks significant resistance in the 11500 area. We could look for prices to top in that region again. The daily RSI is again peaking giving another warning sign that a turn is imminent.

 

CRUDE

Medium term:

Crude oil is moving higher in a primary corrective pattern, wave ‘a’ up is complete and wave b is in force and not finished yet. The 50 period moving average has crossed down through the 100 and could bring with it a rush of selling next week.

I would expect to see a continuation of the sideways to downwards action over the next few weeks in a wave ‘b’. This week saw the RSI turn over and head down, suggesting the decline has some legs in it yet.

Short term:

Continued weakness should be expected over the coming week, on the short-term chart above I have marked waves 'a' and 'b' as complete. We should see the concluding wave down unfold in 5 waves.

This B wave should retrace about 50% of the previous A wave rally, given this guideline we should expect the decline to conclude at approximately $35. I will then be looking for a low risk entry point to go long for the wave C rally.

 

GOLD

Medium term:

the medium term count for Gold has not changed. Gold is in a medium term counter trend rally higher. This rally should take a 3 wave form labelled A,B,C. Wave A is complete, with the sideways action being wave B, and wave C up to follow in the near future.

Wave B seems incomplete at this stage, at a minimum we should see a break of the wave 'a' low. With a possible target at 1160 near to the lower trend line as shown above.

Short term:

I have altered the shorter term count slightly. This new count views Gold within the final decline of the larger wave B down.

Next week should bring further weakness for the gold price to complete wave c in blue. The wave labelling in the chart above shows a lower target as within the 1140 to 1160 range.

 

DOW JONES

 

Medium term.

Last week I spoke about the DOW peaking in wave ‘d’ of a triangle pattern with a possibility of one final push higher to complete. We got that push higher and prices have now popped out over the trend line. This will be a short-term occurence. With wave 'e' likely to start soon.

You can see from the chart that the daily RSI has registered another extreme again this week, this is  another warning sign that the short-term top that is in.

Short term:

In the short term chart above I have marked a critical price point at 17790. the current pattern could thrust a bit higher to complete. The line in red can be viewed as a neckline within a head and shoulders pattern. A break of this line could signal the turn.

The target range for wave ‘e’ is between the lower trend line at about 15600 and the 61.8% retracement of wave ‘d’ at 16295.

That’s it for this weeks Elliott wave picture, Good luck with your trading in the coming week.

For more on how to use Elliot Wave go to How to identify trends, Tops and Bottoms with Elliot Wave Theory