JWagnerFXTrader

JWagnerFXTrader

The ending diagonal pattern is one of my favorite Elliott Wave patterns. It offers defined risk and focused rewards typically yielding excellent risk:reward ratios. As you can see from the chart above, this ending diagonal is counted to finish at least 3 degrees of trend ('C' wave could also be the ending a multiple zig zag making it 4 degrees of trend). A...

JWagnerFXTrader

I've been watching the USDJPY closely and prices are currently at an interesting juncture. The current sell off has overlapped the green circle on the chart. This creates a 3 wave move from the June 4 low to the June 5 higher. This suggests that prices are likely to retrace the whole pattern and revisit the 123 handle. I'm labeling the current wave iv as an...

JWagnerFXTrader

This is an update to yesterday afternoon's chart. With this morning's surge higher, I think we finished wave (iii) at today's high. Today's high did come outside the top end of the price range cited on June 2 ("EURUSD Finishes Wave X"). Since today's high stopped at the 2.618 extension AND at the upper blue channel line, this has me leaning towards wave (iv)...

JWagnerFXTrader

Now that we have surpassed the equal wave measurement for the purple degree, we can look to add to the position in anticipation of 1.53. The size of this position needs to be no greater than 40% the size of the original position (see link at the bottom). The risk to reward ratio is still good, but the 'easy' part of the move has surpassed and trading could get...

JWagnerFXTrader

This is the preferred count I'm following for the EURUSD (for other possibilities, see the post from yesterday). Today's high measures out beautifully for a 5 wave sequence with wave (i) as a leading diagonal. -wave (iii) = 1.618 * wave (i) -wave (v) = wave (i) These are common relationships in a 5 wave sequence. We also have divergence on RSI which is...

JWagnerFXTrader

The EURUSD pattern displays a clear 5 wave move higher from the April low. This suggests an upward flat was in play and it terminated right at the 38.2% retracement of wave (3) . The steep sell off could be the beginnings of wave (5). However, the overlap at 1.1065 places more emphasis towards an X wave lower. A rejection of prices near 1.1225-1.1325 will...

JWagnerFXTrader

The longer view of the EUR/AUD suggests EUR out performance and/or AUD under performance for the next several months. It appears red wave was an ending diagonal. Therefore, the 1.36 low should be solid. Since the circle 5 low did not reach the lower trend line, this expresses some pent up energy available. Breakout trades to the long side are preferred. I...

JWagnerFXTrader

NZDUSD is testing March 2011 levels (.7108). Sentiment positioning shows +3.88 as nearly 4x as many traders are already long the pair vs shorts. When used as a contrarian signal, that means we have a future supply of sellers who would need to close their long position should this move materially lower. This appears to have room to run as well should a...

JWagnerFXTrader

The Loonie appears to have finished off the 'b' wave of an a-b-c expanded flat. The potential ensuing 'c' wave would likely take prices down into the 1.07 handle. If you zoom into a 15 minute chart and focus on the Sept 9-10 price high, you can see prices have established a 5-3 wave sequence lower which suggests a temporary top is in place. The larger trend on...

JWagnerFXTrader

Gold dropped hard yesterday through a support trend line awakening the bears. The drop was anticipated as it appears to be a smaller degree 5th wave to finish off the purple 'B' wave. That drop took us to the 78.6% retracement level of the June-July 2014 up trend. This places Gold at a price point where we are offered a good opportunity to buy with nearly a 1:3...

JWagnerFXTrader

The GBP/CAD has been stuck in a 400 pip range for most of 2014. This morning, the pair reached its 200 Day Simple Moving Average (Daily Chart) which also happens to be the range low for the pair as well. On ranging pairs, one of my favorite strategies is to buy at support on bullish divergence with the CCI oscillator. When inspecting this pair closely on a 3 hr...

JWagnerFXTrader

Now that the EURUSD has thrusted down out of the bearish triangle pattern, prices have fallen to the profit target and are near the Monthly S1 support level. Also, scroll out to a daily chart on the EURUSD (not shown). The November 7, 2013 daily candle drafted a very large wick to the downside which is another level of support near 1.33. What makes the bullish...

JWagnerFXTrader

NatGas appears to be starting a wave c of an a-b-c move. This pattern is the favored pattern so long as price remains above 3.72. The August 12, 2014 move lower was a 3 wave move where red wave 'c' was nearly equal to red wave 'a'. This suggests the whole pattern is likely to be retraced meaning prices visit 4.03. Additionally, the equal wave pattern appears...

JWagnerFXTrader

For those familiar with Elliott Wave analysis, a 5-3 wave sequence indicates the direction of the immediate trend. Its a little premature at the moment to identify a clear 5 down/3 up wave sequence, but as traders we do need to bring a little anticipation because by the time we know for sure what the waves are doing, the move is over. Using fibonacci...

JWagnerFXTrader

The EURUSD appears to be carving a triangle formation. It could be near completion now or after another down up sequence would finish the consolidation. This is a small trade with a positive risk to reward ratio. A move above the c wave high suggests some other pattern is developing.

JWagnerFXTrader

The strong sell-off in the USDMXN over the past few days provides clues that bounces higher have been large corrective moves. First of all, the pattern from May 2013 to Jan 2014 (maroon block labels) suggests it is a large 3 wave bounce higher. The sell off since Jan 2014 could count as an impulsive 5 wave decline. Secondly, the bounce higher starting in June...