GBP/USD Monthly Wave Analysis, February 2009..
The current variant of the wave counting
For the survey wave counting of GBP refer to Annual-09.
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Figure G1. Immediate continuation of the US dollar's strengthening.
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Figure G2. Completion of a large correction against the USD.
Supposedly in the framework of scenario 1 a downward zigzag structure is developing. The choice of one of the equally probable variants will be determined by the location of the ending point of upward wave , which the price will prefer.
For more detailed wave counting onsmaller time-frames andparameters of possible trading plans refer to the daily reports.
References
[*]Introduction (Annaul WA for 2009 )[*]EUR/USD Annual Wave Analysis 2009 [*]GBP/USD Annual Wave Analysis 2009[*]USD/JPY Annual Wave Analysis 2009[*]USD/CHF Annual Wave Analysis 2009[*]Monthly Wave Analysis February 2009[*]EUR/USD, Monthly Wave Analysis February 2009[*]USD/JPY, Monthly Wave Analysis February 2009 [*]USD/CHF, Monthly Wave Analysis February 2009 [*]Wave Analysis[*]Elliott’s Code: Wave Analysis of the FOREX Market [*]Methods of Price Movement Projection (EWA)[*]How to Apply EWA ForecastsDmitry Voznuy
forDmitry@yahoo.comJanuary 31, 2009When using any part of the article for publication or analytical materials reference to the author and Alpari is obligatory.
USD/JPY Monthly Wave Analysis, February 2009
The current variant of the wave counting
For the survey wave counting of JPY refer to Annual-09.
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Figure Y1. Immediate continuation of the yen's strengthening.
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Figure Y2. Completion of a large correction against the yen.
In the framework of scenario 3-dt downward zigzag (A)-(B)-(C) is developing as a main wave of a large diagonal triangle. A small difference between almost equally probable variants lies in the depth of the yen’s decline (the rise of USD/JPY) , which the price will prefer.
From the point of view of the internal structure of this knot the variant in Figure Y1 has a small advantage.
For more detailed wave counting onsmaller time-frames andparameters of possible trading plans refer to the daily reports.
References
[*]Introduction (Annaul WA for 2009 )[*]EUR/USD Annual Wave Analysis 2009 [*]GBP/USD Annual Wave Analysis 2009[*]USD/JPY Annual Wave Analysis 2009[*]USD/CHF Annual Wave Analysis 2009[*]Monthly Wave Analysis February 2009[*]EUR/USD, Monthly Wave Analysis February 2009[*]GBP/USD, Monthly Wave Analysis February 2009 [*]USD/CHF, Monthly Wave Analysis February 2009 [*]Wave Analysis[*]Elliott’s Code: Wave Analysis of the FOREX Market [*]Methods of Price Movement Projection (EWA)[*]How to Apply EWA ForecastsDmitry Voznuy
forDmitry@yahoo.comJanuary 31, 2009When using any part of the article for publication or analytical materials reference to the author and Alpari is obligatory.
[ 本帖最后由 hefeiddd 于 2009-5-4 07:57 编辑 ]
USD/CHF Monthly Wave Analysis, February 2009
The current variant of the wave counting
For the survey wave counting of CHF refer to Annual-09.
http://www.alpari-forex.com/files/pic/docs/14/33188_13959.gif
Figure C1.Immediate continuation of the US dollar's strengthening.
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Figure C2. Completion of a large correction against the dollar.
Supposedly in the framework of scenario 3-dz a new upward zigzag structure is developing. The choice of one of the equally probable variants will be determined by the depth of downward correction which the price will prefer.
For more detailed wave counting onsmaller time-frames andparameters of possible trading plans refer to the daily reports.
References
[*]Introduction (Annaul WA for 2009 )[*]EUR/USD Annual Wave Analysis 2009 [*]GBP/USD Annual Wave Analysis 2009[*]USD/JPY Annual Wave Analysis 2009[*]USD/CHF Annual Wave Analysis 2009[*]Monthly Wave Analysis February 2009[*]EUR/USD, Monthly Wave Analysis February 2009[*]GBP/USD, Monthly Wave Analysis February 2009 [*]USD/JPY, Monthly Wave Analysis February 2009 [*]Wave Analysis[*]Elliott’s Code: Wave Analysis of the FOREX Market [*]Methods of Price Movement Projection (EWA)[*]How to Apply EWA ForecastsDmitry Voznuy
forDmitry@yahoo.comJanuary 31, 2009When using any part of the article for publication or analytical materials reference to the author and Alpari is obligatory.
General notes
From the point of view of wave analysis, the main distinctive feature of the FX market, that influences the global wave picture of the currency pairs, is the relative nature of the prices movement. A chart of any currency pair — is a chart of relative strength of one currency against the other. Permanent progressive movement «forward and up», as in the case of a share index, where weak shares are replaced by strong ones, is unlikely here. Most probably cross rates of the main currencies are in the state of permanent global correction, developing a complicated longstanding corrective structure and increasing variation of such wave countings. Inside of this structure one can see different combinations of Elliott wave patterns that allow to analyze the current situation and to forecast further scenario of events.
Besides, the distinctive features of the FX market that influencethe inner wave structure of patterns, are its high marginality, the practice of currency interventions andtwenty-four-hour conclusion of deals during the working week with changing activity of trading from session to session.
About the current situation on the FX market
In conditions of a developing economical crisis, scenarios withthe midterm strengthening of the US dollar are the most preferable.
Thus, the main expected event of 2009 from the point of view of forecasting of the movement of the currency pairs under consideration is the midterm strengthening of the US dollar inthe form of a corrective wave structure.
All the main and most probable variants of the price movement of the main currency pairs are considered in the corresponding sections.
Accepted abbreviations
«Annual-09» — «Annual Wave Analysis for 2009 »
«Monthly-1208» — «Monthly Wave Analysis for December 2008 »
«Daily-280406» — «Daily Wave Analysis for 28.04.06»
References
[*]EUR/USD Annual Wave Analysis 2009[*]GBP/USD Annual Wave Analysis 2009 [*]USD/JPY Annual Wave Analysis 2009 [*]USD/CHF Annual Wave Analysis 2009 [*]Wave Analysis[*]Elliott’s Code: Wave Analysis of the FOREX Market [*]Methods of Price Movement Projection (EWA)[*]How to Apply EWA ForecastsDmitry Voznuy
forDmitry@yahoo.comJanuary 18, 2009When using any part of the article for publication or analytical materials reference to the author and Alpari is obligatory.
EUR/USD, Annual Wave Analysis 2009
It is difficult to consider global countings of the euro as it was introduced only in 1998 . The synthesized charts of the earlier period, unfortunatelyaren’t univocal. That’s why it is logically to accept the most probable from my point of view mirror pattern of CHF- the global triple zigzag (refer to Annual-09)as a global pattern on the monthly time-frame, as the euro often repeats mirror-likely the movements of its twin-brother. Inthis case all considerations about possible global scenarios of CHF can be referred in fullto the euro.
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Figure E1.Wave counting on the monthly chart. Variant 3-dz.
That’s why it is logically to suppose that the ending wave z of the global triple zigzag may assume the shape of a double/triple zigzagwhile in the nearest future corrective wave of z. will be developing. For the possible scenarios of the development of wave of z refer to the following three Figures.
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Figure E2.Wave counting on the weekly chart. Variant 3-dz-1.
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Figure E3.Wave counting on the weekly chart. Variant 3-dz-2.
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Figure E4.Wave counting on the weekly chart. Variant 3-dz-3.
As the wave structure of this correction develops the number of itspossible variants will be decreasing that will allow to make global scenarios more precise and to project possible targets in the monthly forecasts during the current year .
References
[*]Introduction (Annaul WA for 2009 )[*]GBP/USD Annual Wave Analysis 2009[*]USD/JPY Annual Wave Analysis 2009[*]USD/CHF Annual Wave Analysis 2009[*]Wave Analysis[*]Elliott’s Code: Wave Analysis of the FOREX Market [*]Methods of Price Movement Projection (EWA)[*]How to Apply EWA ForecastsDmitry Voznuy
forDmitry@yahoo.comJanuary 18, 2009When using any part of the article for publication or analytical materials reference to the author and Alpari is obligatory.
[ 本帖最后由 hefeiddd 于 2009-5-4 08:02 编辑 ]
GBP/USD, Annual Wave Analysis 2009
In order to preserve consistency in consideration of possible scenarios of the price movement the numeration of possible variants remains the same.
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Figure G1. Wave counting on the monthly chart. Variant 1.
The most probable scenario from my point of view remains the variant with the global double/triple three and wave of x in the form of a large expanding triangle, which is completing at present.
Possible but not the only variants of the completion of this triangle of x are shown inthe following two Figures.
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Figure G1. Wave counting on the weekly chart. Variant 1-1.
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Figure G3. Wave counting on the weekly chart. Variant 1-2.
The choice of one of the given scenarios will depend on what wave patter the price decline will complete from the mark 2.0 — in the form of a zigzag (variant 1-1) or in the form of an impulse (variant 1-2).
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Figure G4. Wave counting on the monthly chart. Variant 2.
But taking into consideration the precipitation of the pound during 2008, variant 2 considered earlier is quite real.
The given scenarios thoughare not the only ones, single out the main directions of the supposed price movement. As the wave structure of this correction will develop the number of its possible variants will decrease that will allowto make the global scenarios more precise and to project possible targets in the monthly forecasts during the current year .
References
[*]Introduction (Annual WA for 2009 )[*]EUR/USD Annual Wave Analysis 2009[*]USD/JPY Annual Wave Analysis 2009[*]USD/CHF Annual Wave Analysis 2009[*]Wave Analysis[*]Elliott’s Code: Wave Analysis of the FOREX Market [*]Methods of Price Movement Projection (EWA)[*]How to Apply EWA ForecastsDmitry Voznuy
forDmitry@yahoo.comJanuary 18, 2009When using any part of the article for publication or analytical materials reference to the author and Alpari is obligatory.
[ 本帖最后由 hefeiddd 于 2009-5-4 08:05 编辑 ]
USD/JPY, Annual Wave Analysis 2009
In order to preserve consistency in consideration of possible scenarios of the price movement the numeration of possible variant remains the same.
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Figure Y1. Wave counting on the monthly chart. Variant 2.
One of the possible scenarios, distinct from the most widespread, is the variant of the global double/triple zigzag (or three), known variant 2, where the supposed corrective wave x may assume the shape of a flat or a double/triple three.
In this case after the nearest completion of wave of x a progressive price rise in the form of an impulse or a zigzag structure should be expected.
But the most probable and the most widespread variant is my variant of 2004 year in the form of a global impulse with the completed fourth wave IV in the form of a horizontal triangle.
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Figure Y2. Wave counting on the monthly chart. Variant 3-1.
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Figure Y3. Wave counting on the weekly chart. Variant 3-1.
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Figure Y4. Wave counting on the monthly chart. Variant 3-2.
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Figure Y5. Wave counting on the weekly chart. Variant 3-2.
The distinction between variant s3-dt-1 and 3-dt-2 lies in different matching of the main waves of the ending diagonal triangle V.
The given scenarios of possible development of the supposed wave V single out the main directions of the supposed price movement. As this wave structure develops the number of its possible variants will decrease that will allowto make the global scenarios more precise and to project possible targets in the monthly forecasts during the current year .
References
[*]Introduction (Annaul WA for 2009 )[*]EUR/USD Annual Wave Analysis 2009[*]GBP/USD Annual Wave Analysis 2009[*]USD/CHF Annual Wave Analysis 2009[*]Wave Analysis[*]Elliott’s Code: Wave Analysis of the FOREX Market [*]Methods of Price Movement Projection (EWA)[*]How to Apply EWA ForecastsDmitry Voznuy
forDmitry@yahoo.comJanuary 18, 2009When using any part of the article for publication or analytical materials reference to the author and Alpari is obligatory
[ 本帖最后由 hefeiddd 于 2009-5-4 08:06 编辑 ]
USD/CHF, Annual Wave Analysis 2009
In order to preserve consistency in the consideration of the possible scenarios of the price movement the numeration of the possible variants remains the same.
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Figure C1. Wave counting on the monthly chart. Variant 2.
The wave structure of the accepted global pattern doesn’t rule out that the triple zigzag (or diagonal triangle marked with grey color) is completed. In this case the supposed terminus of the whole pattern may serve as a critical level.
If the supposition is confirmed developing of a corrective wave (b), that may assume any accepted shape may be expected in the next several years .
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Figure C2. Wave counting on the monthly chart. Variant 3.
At the same time the current correlation of waves of z and of z of the ending wave z of the global triple zigzag (or diagonal triangle marked with grey color) allows to suppose that wave of z may continue developing. In this case the terminus of wave (2) of of z and the beginning of wave of z itself may serve as critical levels.
If the supposition is confirmedthe US dollar’s progressive decline will continue and wave of z will reach approximate equality with the first leg of zigzag of z.
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Figure C3. Wave counting on the monthly chart. Variant 3-dz.
The most probable scenario from my point of view is somewhere in the middle. Taking into consideration the ongoing economical crisis and the US dollar’s strengthening on the back of the crisis it is logically to suppose further strengthening in 2009 as well.
In this case the ending wave z of the global triple zigzag (or diagonal triangle marked with grey color) may assume the shape of a double/triple zigzag while in the nearest future corrective wave of z.will be developing. Possible scenarios of the development of this wave of z are shown in the following Figures.
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Figure C4. Wave counting on the weekly chart. Variant 3-dz-1.
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Figure C5. Wave counting on the weekly chart. Variant 3-dz-2.
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Figure C6. Wave counting on the weekly chart. Variant 3-dz-3.
The given scenarios of the possible development of the supposed wave though aren’t the only ones but single out the main directions of the supposed price movement and once again underline multi variation of corrections.
As the wave structure of this correction develops the number of itspossible variant will decrease that will allowto make the global scenarios more precise and to project possible targets in the monthly forecasts during the current year.
References
[*]Introduction (Annaul WA for 2009 )[*]EUR/USD Annual Wave Analysis 2009 [*]GBP/USD Annual Wave Analysis 2009[*]USD/JPY Annual Wave Analysis 2009[*]Wave Analysis[*]Elliott’s Code: Wave Analysis of the FOREX Market [*]Methods of Price Movement Projection (EWA)[*]How to Apply EWA ForecastsDmitry Voznuy
forDmitry@yahoo.comJanuary 18, 2009When using any part of the article for publication or analytical materials reference to the author and Alpari is obligatory.
[ 本帖最后由 hefeiddd 于 2009-5-4 08:08 编辑 ]
The Decline of the Canadian Dollar Continues (USD/CAD)
In the article Again the Canadian Dollar and Other Dollar Pairs variant of possible completion of the decline of the Canadian dollar were considered. Judging by the current wave counting the Canadian dollar preferred the alternate scenario plotted inFigure 4 of the mentioned article.
Let’s consider the details of the current scenario that can be of practical use for making a trading plan.
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Figure 1. Wave counting on the monthly chart.
On the monthly time-frame upward correction is developing after global downward impulse . What shape it will assume isn’t clear yet, but by the moment the supposed upward zigzag (A) of is completing. But so far it isn’t ruled out that this zigzag can transform intoa large upward impulse.
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Figure 2. Wave counting on the weekly chart.
In order to complete the supposed zigzag (A) of the price has to build up the ending wave of C of (A) of the second leg C of (A) of zigzag. The projected area of its terminus may be in the range of 1.30..1.35.
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Figure 3. Wave counting on the daily chart.
One ofthe variants of counting of the supposed impulse C of (A) is shown in the Figure. Supposedly, wave of C of (A) is completed, and the terminus of wave of C of (A) may climb above the level of the terminus of wave of C of (A) (if it doesn’t develop a truncation). But this supposition contradicts the correlation of the main waves inside wave , plotted in the Figure with grey color. The details will be considered in the following two Figures.
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Figure 4. Wave counting on 480 min chart.
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Figure 5. Wave counting on 120 min chart.
In the Figures above one can see that if we take the uptrend fromthe terminus of wave (value 1.1769) for wave in the whole it won’t be able to climb above the confirmatory level 1.2982, without breaking the critical level 1.2944 (i.e. without breaking the rules of the wave theory).
That’s why it is logical to suppose that at the moment not wave of C, is developing, but its first subwave (i) of of C.
The terminus of wave (i) of of C this week below the 1.2944 level and the development of downward correction (ii) of of C in the area of 1.2250..1.2050the next week will confirm this supposition.
I would like to note that this scenario isn’t the only one though it is the most probable from my point of view at the moment.
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Figure 6. Wave counting on 120 min chart.
Supposedly impulse (i) is completed. If the supposition is true further development of downward correction (ii) should be expected.
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Figure 7. Wave counting on 120 min chart.
Supposedly impulse (i) is completed. The wave structure of the started correction allows to suppose its nearest completion. This may be the terminus of the whole correction (ii).
But its relative sizes and small depth allow to suppose that this is only the first part of wave (ii) — zigzag a of (ii).
The confirmation of this supposition will be:
[*]either upward movement of a corrective nature not higher than the 1.29 mark (wave b of (ii) — ordinary/double/triple zigzag) and then wave (ii) may assume the shape of a flat or a double three,[*]or the continuation of downward progressive movement inzigzag form w-x-y(-x-z) in case the whole wave (ii) decides to assume the shape of a double/triple zigzag.In this case the planned terminus of wave (ii) — the end of the next week.
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Figure 8. Wave counting on 120 min chart.
Supposedly double zigzag (ii) is completed. In the framework of the accepted scenario the price has only two possible variants — either to begin immediately developing of the supposed upward wave (iii), or to continue developing of downward triple zigzag (ii).
In the first case good prospects for long positions open. The critical levels in this case will be the supposed ending of wave (ii).
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Figure 9. Wave counting on 120 min USD/CAD chart.
It isn’t ruled out that the supposed wave (ii) has developed inthe form of a triple zigzag. If this is the casethe first waves of upward wave (iii) has already started developing. It gives good chances for long positions. But one shouldn’t forget that this supposition requires its confirmation.
Addition of 30.01.09http://www.alpari-forex.com/files/pic/docs/14/33112_13948.gif
Figure 10. Wave counting on 120 min USD/CAD chart.
The price has reached the lower border of the projected range near the 78% mark having developed the supposed wave (ii) in the form of a triple zigzag. If this is the case the first waves of upward wave (iii) has started to develop. This gives good chances for long positions. But one shouldn't forget that this supposition requires confirmation.
Note
Given possible trading plans are purely informational purpose only and they should not be considered as trading guides or an invitation to make a transaction.
Reference
[*]Introduction (Annual WA for 2009 )[*]EUR/USD Annual 2009[*]GBP/USD Annual 2009[*]USD/JPY Annual2009[*]USD/CHF Annual 2009[*]Monthly Wave Analysis, January 2009 [*]EUR/USD, Monthly Wave Analysis, January 2009[*]GBP/USD, Monthly Wave Analysis, January 2009[*]USD/JPY, Monthly Wave Analysis, January 2009[*]USD/CHF Monthly Wave analysis, January 2009[*]Wave Analysis[*]Methods of Price Movement Projection (EWA)[*]How to Apply EWA ForecastsDmitry Voznuy
forDmitry@yahoo.comJanuary 21, 2009When using any part of the article for publication or analytical materials reference to the author and Alpari is obligatory
Barrier and Other Triangles (EUR/USD, GBP/USD, USD/CHF)
The uncertainty to the FX market participants is shown in the price charts in the form of a horizontal extended correction as a rule in the form of a triangle. In most cases after the completion of such a correction the preceding trend continues in the previous direction and its length is comparable with the height of the triangle itself (perhaps via the Fibonacci coefficient).
And now the European dollar pairs completed developing an extended horizontal correction after which it is natural to expect the continuation of the trend in the favor of the US dollar. And this circumstances must be used the real trade.
Let’s consider each currency pair separately.
1. EUR/USDFor survey wave counting of EUR refer to Monthly-1108 and to the article Possible Depth of the Decline .
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Figure 1. Wave counting on 480 min chart. Variant 3dz.
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Figure 2. Wave counting on 120 min chart. Variant 3dz.
Supposedly the euro is developing wave of C in the form of a classical horizontal contracting triangle. Its completion is expected in the area of 1.29..1.30. If the price fixes below levels 1.26..1.25 it may mean the beginning of the ending price decline (wave of C), optimal projected target of which lies in the area of 1.20 mark.
2. GBP/USDFor survey wave counting of GBP refer to Monthly-1108 and to the article Possible Depth of the Decline .
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Figure 3. Wave counting on 480 min chart. Variant 1.
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Figure 4. Wave counting on 120 min chart. Variant 1.
Supposedly the pound is developing wave (iv) of in the form of a skewed triangle. Its completion is expected in the area of 1.60. If the price fixes below the level 1.55 it may mean the beginning of the ending price decline (wave (v) of ), the optimal projected target of which lies in the area of the 1.50 mark.
4. USD/CHFFor survey wave counting of CHF refer to Monthly -1108 and to the article Possible Depth of the Decline .
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Figure 5. Wave counting on 720 min chart. Variant 3dz.
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Figure 6. Wave counting on 120 min chart. Variant 3dz.
Supposedly CHF is developing wave of C in the form of a barrier triangle. This is a kind of a horizontal triangle which Robert Prechter singled out as a separate kind. Barrier triangles are characterized by almost horizontal forming line for corners B and D. A breach of this line means the beginning of the ending price thrust for the pattern of senior wave level.
The completion of the supposed barrier triangle of C is expected in the area of 1.17..1.16. If the price fixes above the level 1.18 it may mean the beginning of the ending price rise (wave of C), the projected target of which lies in the area of the 1.20 mark and higher.
As you can see in spite of the difference in details the wave counting of the European dollar pairs supposes the completion of the extended horizontal correction typical to the fourth waves of impulse in the nearest future and further strengthening of the US dollar after its completion.
Addition of 11.11.08Traders who placed orders in advance according to my recommendations may take the first portion of profit and plan further trade in the favor of the US dollar.
But please note the critical levels indicated in the forecast for today (Cunning of the market (Daily -111108)). In spite of the fact that the expected targets aren’t reached yet if the price crosses the critical levels it may mean the mid-term trend reversal against the US dollar and consequently the reversal of mid-term trading positions.
Note
Given possible trading plans are purely informational purpose only and they should not be considered as trading guides or an invitation to make a transaction.
Reference
[*]The review of the bigger Time-Frames (Annual Wave Analysis, 2008) [*]EUR/USD (Annual Wave Analysis, 2008)[*]GBP/USD (Annual Wave Analysis, 2008)[*]USD/JPY (Annual Wave Analysis, 2008)[*]USD/CHF (Annual Wave Analysis, 2008)[*]Monthly Wave Analysis, November 2008 [*]EUR/USD, Monthly Wave Analysis, November 2008 [*]GBP/USD, Monthly Wave Analysis, November 2008 [*]USD/JPY, Monthly Wave Analysis, November 2008 [*]USD/CHF, Monthly Wave Analysis, November 2008 [*]The Review of the Bigger Time-Frames (IV quarter of 2008)[*]Variety of Variants for GBP/JPY [*]A Rare Form of Zigzag (EURJPY)[*]Again the Canadian Dollar and Other Dollar Pairs (USD/CAD, EUR/USD, GBP/USD, USD/CHF)[*]Possible Depth of the Decline (EUR/USD, GBP/USD, USD/JPY, USD/CHF)[*]Wave Analysis[*]Methods of Price Movement Projection (EWA)[*]How to Apply EWA ForecastsDmitry Voznuy
forDmitry@yahoo.comNovember 9, 2008When using any part of the article for publication or analytical materials reference to the author and Alpari is obligatory.
Possible Depth of the Decline (EUR/USD, GBP/USD, USD/JPY, USD/CHF)
The weakening of the European currencies and the strengthening of the Japanese yen against the USD (EUR/USD, GBP/USD, USD/JPY, USD/CHF) has been lasting for several months already. That’s why at the moment the main question is to determine the possible depth of such an impetuous price movement.
1. EUR/USD
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Figure 1. Wave counting on 720 min chart. Variant 3dz.
If we consider price movement of the euro for the last months it isn’t ruled out that at the moment the downward zigzag A-B-C of (W) completes developing. The internal structure, the external shape and mutual proportions of the waves of the supposed pattern speak in the favor of this supposition.
If the supposition is true in order to complete zigzag the price needs to complete wave of C and to build up the ending waves and of C.
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Figure 2. Wave counting on the weekly chart. Variant 3dz.
The price may reach strong resistance levels 1.20-1.15. Taking into consideration almost completed pattern of zigzag and proximity of strong resistance levels zone it is natural to supposes that this is where the upward reversal of the mid-term trend may develop.
If we take into consideration the violence of the price decline the bounce pf the price from these levels in the form of the supposed wave (X) of and its recurrent approach to them in the form of the supposed wave (Y) of are quite possible.
The analysis of the wave structure after the reversal of the mid-term trend will show whether the supposed trend reversal will mark the completion of the whole wave or only of its part.
2. GBP/USDhttp://www.alpari-forex.com/files/pic/docs/13/32243_12371.gif
Figure 3. Wave counting on 720 min chart. Variant 1.
The price movement of the pound during the last months may represent a downward zigzag -- of Y. The internal structure, the external shape and mutual proportions of the supposed pattern speak in the favor of this supposition.
If the supposition is true in order to complete zigzag the price needs to complete wave (iii) of and to build up ending waves (iv) and (v) of .
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Figure 4. Wave counting on the weekly chart. Variant 1.
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Figure 5. Wave counting on the monthly chart. Variant 1.
The price may reach strong resistance level 1.4. Taking into consideration almost completed pattern of zigzag Y of (E) of and proximity of a strong resistance level it is natural to suppose that this is where the upward reversal of mid-term trend may develop.
If we take into consideration the violence of the price decline the bounce of the price from these levels in the form of the supposed wave X of (E) of and its recurrent approach to it in the form of the supposed wave Z of (E) of are quite possible.
The analysis of the wave structure after the reversal of the mid-term trend will show whether the supposed trend reversal will mark the completion of the whole wave (E) of or only of its part.
3. USD/JPYhttp://www.alpari-forex.com/files/pic/docs/13/32243_12374.gif
Figure 6. Wave counting on 720 min chart. Variant 3dt.
The price movement of the yen during the last months may represent a downward impulse 1-2-3-4-5 of (A). the internal structure, external shape and mutual proportions of the supposed pattern speak in the favor of this supposition.
If the supposition is true in order to complete the impulse the price needs to complete wave 3 of (A) and to build up waves 4 and 5 of (A).
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Figure 7. Wave counting on the weekly chart. Variant 3dt.
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Figure 8. Wave counting on the monthly chart. Variant 3dt.
Supposedly the above-mentioned impulse (A) is the first leg of the ending zigzag of diagonal triangle V. If the supposition is true ideally the price after impulse (A) of of V must develop upward correction (B) of of V, and then at least touch the resistance level 80 (more precisely to cross the mark 79.78) with the second leg (C) of of V, thus having completed diagonal triangle V and the whole global downward impulse I-II-III-IV-V.
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Figure 9. Wave counting on 720 min chart. Variant 3dz.
If we take into consideration the price movement of CHF during the last months it isn’t ruled out that at the moment upward zigzag A-B-C of (Y) completes developing. The internal structure, the external shape and mutual proportions of the supposed pattern speak in the favor of this supposition.
If the supposition is true in order to complete zigzag the price needs to complete wave of C and build up the ending waves and of C.
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Figure 10. Wave counting on the weekly chart. Variant 3dz.
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Figure 11. Wave counting on the monthly chart. Variant 3dz.
The price may reach strong resistance levels 1.20-1.30. Taking into consideration almost completed pattern of zigzag and proximity of strong resistance levels zone it is natural to suppose that this is where the downward reversal of mid-term trend may develop.
If we take into consideration the violence of the price rise the bounce of price from these levels in the form of the supposed wave (X) of and its recurrent approach to them in the form of the supposed wave (Z) of are quite possible.
The analysis of the wave structure after the mid-term trend reversal will show whether the supposed trend reversal will mark the completion of the whole wave or only of its part.
Note
Given possible trading plans are purely informational purpose only and they should not be considered as trading guides or an invitation to make a transaction.
Reference
[*]The review of the bigger Time-Frames (Annual Wave Analysis, 2008) [*]EUR/USD (Annual Wave Analysis, 2008)[*]GBP/USD (Annual Wave Analysis, 2008)[*]USD/JPY (Annual Wave Analysis, 2008)[*]USD/CHF (Annual Wave Analysis, 2008)[*]Monthly Wave Analysis, October 2008 [*]EUR/USD, Monthly Wave Analysis, October 2008 [*]GBP/USD, Monthly Wave Analysis, October 2008 [*]USD/JPY, Monthly Wave Analysis, October 2008 [*]USD/CHF, Monthly Wave Analysis, October 2008 [*]The Review of the Bigger Time-Frames (IV quarter of 2008)[*]Variety of Variants for GBP/JPY [*]A Rare Form of Zigzag (EURJPY)[*]Again the Canadian Dollar and Other Dollar Pairs (USD/CAD, EUR/USD, GBP/USD, USD/CHF)[*]Wave Analysis[*]Methods of Price Movement Projection (EWA)[*]How to Apply EWA ForecastsDmitry Voznuy
forDmitry@yahoo.comOctober 28, 2008When using any part of the article for publication or analytical materials reference to the author and Alpari is obligatory.
Again the Canadian Dollar and Other Dollar Pairs (USD/CAD, EUR/USD, GBP/USD, USD/CHF)
In the article released not long ago Possible Beginning of the Canadian Dollar’s Decline it was supposed that the long-term trend might reverse against the US dollar in the near future upon condition that the ending wave of C of upward impulse didn’t start to develop an extension.
In the end the price preferred to continue step by step the upward movement in the favor of the US dollar developing and extension. Besides the price broke the critical level having forced us to change the previous scenario on the large time-frames. On the small time-frames the wave counting hasn’t changed so far.
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Figure 1. Possible counting of impulse of C.
Really, progressive upward price movement in a narrow trend channel is an impulse and the price for a long time has been redrawing its top developing an extension.
In this situation we can only project possible areas of the terminus of wave of C, expecting patiently the confirmation of the downward trend reversal. Thus if the price fixes below the lower border of the upward trend channel and then passes the confirmatory levels it may serve as the confirmation of the reversal.
At the moment the wave structure of the supposed impulse of C is completed with the internal waves and doesn’t rule out that the impulse itself is completed.
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Figure 2. Possible counting of impulse C with and extension in wave of C .
As for the place that is given to this impulse in a pattern of a higher level by its impetuosity and proportions it can be both the ending wave of C in the form of an extension and only the third wave (iii) of of impulse C.
In the first case it is natural to expect considerable price decline in the nearest future.
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Figure 3. Possible counting of large zigzag A-B-C.
If we consider the supposed zigzag A-B-C in whole the correlation of a zigzag’s legs 1 to 2 (200%) is are met quite often and is close to the optimal 1:1.618, that may speak indirectly about its possible completion.
But if the counting of the supposed zigzag A-B-C hasn’t been changed the global scenarios of the Canadian dollar has changed.
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Figure 4. Wave counting on the weekly USD/CAD chart.
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Figure 5. Wave counting on the monthly USD/CAD chart.
Supposedly the global downward impulse of zigzag -- is completed and at the moment correction or its part (A) of is completing.
Not only the fact that the price reached a strong resistance level at 1.18 and the completed wave structure of wave (A) or , but also readiness of other dollar pairs to reverse the long-term trend against the US dollar in the nearest future (refer to Figures below) serves as an additional argument in the favor of the reversal of the long-term trend downward in the nearest future.
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Figure 6. Wave counting on the weekly EUR/USD chart.
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Figure 7. Wave counting on the daily EUR/USD chart.
The completed wave structure of zigzag A-B-C of (A), the expected Elliott’s double retracement and also the divergence of the price and RSI are additional arguments in the favor of the possible beginning of a new stage of the US dollar’s weakening (the rise of EUR/USD) in the nearest future.
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Figure 8. Wave counting on the weekly GBP/USD chart.
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Figure 9. Wave counting on the daiy GBP/USD chart.
The completed wave structure of zigzag -- of Y of (E), strong resistance level at 1.7, and also the divergence of the price and RSI are additional arguments in the favor of the possible beginning of a new stage of the US dollar’s weakening (the rise of GBP/USD) in the nearest future.
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Figure 10. Wave counting on the weekly USD/CHF chart.
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Figure 11. Wave counting on the daily USD/CHF chart.
The completed wave structure of zigzag -- of Y of (A), the expected Elliott’s double retracement and the divergence between the price and RSI are additional arguments in the favor of the possible beginning of a new stage of the US dollar’s weakening (the decline of USD/CHF) in the nearest future.
Thus at the moment the wave counting of several dollar pairs speak about possible reversal of the long-term trend against the US dollar in the nearest future. But until such a reversal is confirmed we may speak about this only suppositionally.
Addition of October 16, 2008http://www.alpari-forex.com/files/pic/docs/13/32069_12104.gif
Figure 12. Wave counting on 120 min USD/CAD chart.
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Figure 13. Wave counting on 720 min USD/CAD chart.
At the moment the wave counting confirms the supposition released earlier but it doesn’t rule out the ending price thrust upward.
Addition of October 22, 2008http://www.alpari-forex.com/files/pic/docs/13/32069_12247.gif
Figure 14. Wave counting on 720 min chart.
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Figure 15. Wave counting on 120 min chart.
At the moment the wave counting on the smaller time-frames confirms the supposition made earlier. Besides, MACD 5-34-5 and RSI(8) doesn't rule out the possibility of the mid-term trend reversal against the US dollar (the decline of USD/CAD) in the near future.
There remains for us toexpect the price to fix beyond the lower border of the channel of impulse v of (v) of of C and impulse of C.
Note
Given possible trading plans are purely informational purpose only and they should not be considered as trading guides or an invitation to make a transaction.
Reference
[*]The review of the bigger Time-Frames (Annual Wave Analysis, 2008) [*]EUR/USD (Annual Wave Analysis, 2008)[*]GBP/USD (Annual Wave Analysis, 2008)[*]USD/JPY (Annual Wave Analysis, 2008)[*]USD/CHF (Annual Wave Analysis, 2008)[*]Monthly Wave Analysis, October 2008[*]EUR/USD, Monthly Wave Analysis, October 2008[*]GBP/USD, Monthly Wave Analysis, October 2008 [*]USD/JPY, Monthly Wave Analysis, October 2008 [*]USD/CHF, Monthly Wave Analysis, October 2008 [*]The Review of the Bigger Time-Frames (IV quarter of 2008)[*]Variety of Variants for GBP/JPY [*]A Rare Form of Zigzag (EURJPY)[*]Possible Ending of the Canadian Dollar’s Decline [*]Wave Analysis[*]Methods of Price Movement Projection (EWA)[*]How to Apply EWA ForecastsDmitry Voznuy
forDmitry@yahoo.comOctober 12, 2008When using any part of the article for publication or analytical materials reference to the author and Alpari is obligatory.
Possible Ending of the Canadian Dollar’s Decline
In August the wave counting of the Canadian Dollar made it possible to suppose a downward reversal (refer to the article Probable Beginning of the Strengthening of the Canadian Dollar). Unfortunately the supposition wasn’t confirmed as the price broke the critical level. But the nature of upward movement remained corrective.
At the moment waves again don’t rule out a downward reversal of the trend in the near future, that’s why we will consider in detail consequent wave counting on the main time-frames.
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Figure 1. Wave counting of possible global USD/CAD zigzag.
Please note that the survey wave counting has changed (compare to the Figure 1 in the article Probable Beginning of the Canadian Dollar’s Strengthening). The previous variant isn’t cancelled yet but in the new scenario some previous shortcomings are excluded.
In the new scenario the second leg of the global zigzag -- is represented in the form of a possible diagonal triangle corrective waves (2) and (4) of of which increase consequently their length and amplitude in comparison with the previous correction , as though swinging oscillations of the price and preparing it to an up-surge. But before this up-surge occurs the supposed wave pattern – expanding diagonal triangle must complete.
If the supposition of the diagonal triangle is true the decline of USD/CAD may be not so pessimistic as in the previous variant and may complete in the area of values 0.9-0.8. The critical level before the completion of the diagonal triangle is the terminus of wave (2) of , the confirmatory level is the terminus of wave (3) of (if there is no truncated fifth (5) of ).
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Figure 2. Wave counting of a large diagonal triangle of USD/CAD.
In the diagonal triangle itself the level 1.0930 (the terminus of wave (1) of ) is of special interest. Ideally the terminus of wave (4) of must cross it. But in reality it may not happen.
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Figure 3. Wave counting on the daily USD/CAD chart.
In the new variant of counting the supposed wave (4) of represent a proportional upward zigzag demonstrating the guideline of alternation for zigzags (refer to page 140 of my book). And wave B of (4) in the form of an extended horizontal correction underlines corrective nature of the whole construction.
If wave of C of (4) doesn’t decide to develop an extension the completion of the whole construction should be expected in the near future.
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Figure 4. Wave counting on 720 min USD/CAD chart.
The completeness of the supposed impulse C of (4) with internal waves and their mutual proportionality also supposes its completion in the near term.
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Figure 5. Wave counting on 60 min USD/CAD chart.
The wave structure of wave of C on the hourly time-frame enables us to suppose that it is almost completed. But only after the price fixes below the lower border of the trend channel of wave C of (4) on Figure 4 we will be able to speak about it more surely.
Thus the completion of a large upward correction and the beginning of a considerable decline of USD/CAD in the near term is expected. But until the completion of the uptrend is confirmed it is better to remain out of the market planning long-term short positions.
Addition of 07.10.08http://www.alpari-forex.com/files/pic/docs/12/31990_11872.gif
Figure 6. Wave counting on 60 min USD/CAD chart.
Supposedly wave (v) of of C decided to develop an extension. After its completion it is natural to expect the completion of wave C and a downward reversal of the long-term trend..
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Figure 7. Wave counting on 720 min USD/CAD chart.
The ending impulse of C of (4) of impulse C of (4) may reach 162% of the length of the first wave of C of (4). After its completion it is natural to expect the completion of wave C and a downward reversal of the long-term trend (if wave of C of (4) doesn’t decide to develop an extension).
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Figure 8. Wave counting on the weekly USD/CAD chart.
Wave (4) of has already crossed the confirmatory level 1.0930 and entered the territory of wave (1) of , thus confirming indirectly my supposition about the development of wave in the form of an expanding diagonal triangle. The critical level for this scenario remains the terminus of wave (2) of .
Note
Given possible trading plans are purely informational purpose only and they should not be considered as trading guides or an invitation to make a transaction.
Reference
[*]The review of the bigger Time-Frames (Annual Wave Analysis, 2008) [*]EUR/USD (Annual Wave Analysis, 2008)[*]GBP/USD (Annual Wave Analysis, 2008)[*]USD/JPY (Annual Wave Analysis, 2008)[*]USD/CHF (Annual Wave Analysis, 2008)[*]Monthly Wave Analysis, October 2008[*]EUR/USD, Monthly Wave Analysis, October 2008[*]GBP/USD, Monthly Wave Analysis, October 2008 [*]USD/JPY, Monthly Wave Analysis, October 2008 [*]USD/CHF, Monthly Wave Analysis, October 2008 [*]The Review of the Bigger Time-Frames (IV quarter of 2008)[*]Variety of Variants for GBP/JPY [*]A Rare Form of Zigzag (EURJPY)[*]Wave Analysis[*]Methods of Price Movement Projection (EWA)[*]How to Apply EWA ForecastsDmitry Voznuy
forDmitry@yahoo.comOctober 4, 2008When using any part of the article for publication or analytical materials reference to the author and Alpari is obligatory.
The Review of the Bigger Time-Frames (IV quarter of 2008)
The US dollar’s strengthening last months was so large-scale that we may suppose the completion of the global zigzag in the European currencies under consideration (refer to Figures 1..3, below).
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Figure 1. The completed global zigzag EUR/USD.
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Figure 2. The completed global zigzag GBP/USD.
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Figure 3. The completed global zigzag USD/CHF.
If the supposition of the completion of the global zigzag is true it isn’t ruled out that the global decline of the US dollar is completed as well The Review of the Bigger Time-Frames (Annual WA for 2008 )].
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Figure 4. Survey wave counting on the monthly USD/CHF chart. Variant 2.
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Figure 5. Wave counting on the monthly EUR/USD chart. Variant 2.
For EUR and CHF it means the completion of the global diagonal triangle (or triple zigzag) (a) and the beginning of the development of a new global trend in the favor of the dollar, and it is premature to speak of its shape .
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Figure 6.Survey wave counting on the monthly GBP/USD chart. Variant 2.
For GBP it means the completion of the global wave-link x and further development of zigzag downward wave y.
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Figure 7. Survey wave counting on the monthly USD/JPY chart. Variant 2.
For JPY possible large-scale strengthening of the dollar means the change of the familiar scenario with the global downward impulse to variant 2 with global double three or double zigzag.
But financial and economic indicators of the USA leave much to be desired recently which doesn’t rule out a new stage of the dollar’s weakening. In this case global zigzag considered in Figures 1..3 above may transform into a double (or triple) zigzag (refer to Figure 8..12, below). These very scenarios seem to me the most probable at the moment.
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Figure 8. Wave counting on the monthly EUR/USD chart. Variant 3dz.
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Figure 9. Wave counting on the monthly USD/CHF chart. Variant 3dz.
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Figure 10. Survey wave counting on the monthly USD/CHF chart. Variant 3dz.
For EUR and CHF it means at first the completion of wave link of V and only then the beginning of a new stage of the dollar’s weakening in the form of a zigzag structure of V. In this case the price may break the generating line of contracting diagonal triangle (refer to Figure 10).
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Figure 11. Wave counting on the monthly GBP/USD chart. Variant 1.
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Figure 12. Survey wave counting on the monthly GBP/USD chart. Variant 1.
For GBP it means at first the completion of expanding horizontal triangle of x and only then the beginning of a new stage of the dollar’s weakening in the form of zigzag structure of x.
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Figure 13. Wave counting on the monthly USD/JPY chart. Variant 3dt.
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Figure 14. Survey wave counting on the monthly USD/JPY chart. Variant 3dt.
For JPY it means at first the completion of wave of V in the form of possible zigzag (A)-(B)-(C) and only then the beginning of a new stage of the dollar’s weakening in the form of further developing of downward diagonal triangle V.
Note
Given possible trading plans are purely informational purpose only and they should not be considered as trading guides or an invitation to make a transaction.
Reference
[*]The review of the bigger Time-Frames (Annual Wave Analysis, 2008) [*]EUR/USD (Annual Wave Analysis, 2008)[*]GBP/USD (Annual Wave Analysis, 2008)[*]USD/JPY (Annual Wave Analysis, 2008)[*]USD/CHF (Annual Wave Analysis, 2008)[*]Monthly Wave Analysis August, 2008[*]EUR/USD, Monthly Wave Analysis August, 2008[*]GBP/USD, Monthly Wave Analysis August, 2008[*]USD/JPY, Monthly Wave Analysis August, 2008[*]USD/CHF, Monthly Wave Analysis August, 2008[*]Variety of Variants for GBP/JPY [*]A Rare Form of Zigzag (EURJPY)[*]Wave Analysis[*]Methods of Price Movement Projection (EWA)[*]How to Apply EWA ForecastsDmitry Voznuy
forDmitry@yahoo.comSeptember 22, 2008When using any part of the article for publication or analytical materials reference to the author and Alpari is obligatory.
Probable Beginning of the Canadian Dollar’s Strengthening (USD/CAD)
Upward price movement of the Canadian dollar since the last November has been so far of a corrective nature. That’s why the continuation of the global strengthening of the Canadian dollar (the decline of USD/CAD) is at the moment the most probable scenario.
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Figure 1. Wave counting on the monthly chart.
In the Figure below only one of a great number of possible variants of counting is given but it is synchronized with the expected decline of the US dollar in other dollar pairs (refer to The Review of Bigger Time-Frames(2-nd half of 2008)).
According to this scenario the beginning of a new stage of the US dollar’s weakening (the decline of USD/CAD) should be expected in the near future.
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Figure 2. Wave counting on the weekly chart.
In fact the supposed corrective wave (2) has assumed the shape of an upward double zigzag, has reached the optimal Fibo level of the second waves of impulse (~ 62%) and most likely it is completed. This scenario corresponds to the alternate wave counting released earlier (refer to Figure 2 in the article One of the Possible Scenarios for USD/CAD).
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Figure 3. Wave counting on the daily chart.
A full set of the main waves for this pattern and their interrelation speak of the possible completion of double zigzag W-X-Y of (2). But this supposition must be confirmed as this variant of counting isn’t the only one.
Wave X of (2), supposedly, is a truncated triangle.
Note. In the terminology of R. Prechter triangles with three main waves or disproportionately small ending waves and are called truncated.
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Figure 4. Wave counting on 240 min chart.
The completeness of the ending upward impulse of Y of (2) with the internal waves and the development of the supposed downward wedge ? Which means possible beginning of a new downtrend speak in the favor of the beginning of a new stage of the US dollar decline (the decline of USD/CAD) in the near future.
At the same time the alternate counting in the upper part of the chart so far doesn’t rule out upward thrust of the price.
It remains for us to wait for the confirmation of one or another scenario. The critical levels for the accepted variant of counting are plotted to the chart.
Addition of August 19http://www.alpari-forex.com/files/pic/docs/11/31372_10867.gif
Figure 5. Wave counting on 60 min chart of USD/CAD.
The supposed downward wedge ? may be the beginning of a new stage of the decline of USD/CAD. If this is the case it opens good possibilities for long-term short positions.
Addition of September 5, 2008http://www.alpari-forex.com/files/pic/docs/12/31372_11257.gif
Figure 6. Wave counting on the daily USD/CAD chart. Possible alternate.
A supposition about possible price movement of the Canadian dollar remains valid — probably, upward wave (2) of of the global downward zigzag -- is completing. After this zigzag the strengthening of the Canadian dollar may start (waves (3) and (5) of ).
But the price broke the critical level of the main variant and the ending point of this correction (2) may be somewhat different in the framework of the alternate scenario which requires its confirmation so far. A breach of the lower border of the upward trend channel by the price and then passing of the confirmatory levels may become the first confirmations of the beginning of the trend reversal against the US dollar.
Note
Given possible trading plans are purely informational purpose only and they should not be considered as trading guides or an invitation to make a transaction.
Reference
[*]The Review of the Bigger Time-Frames(2-nd half of 2008)[*]Variety of Variants for GBP/JPY [*]A Rare Form of Zigzag (EURJPY)[*]Wave Analysis[*]Methods of Price Movement Projection (EWA)[*]How to Apply EWA ForecastsDmitry Voznuy
forDmitry@yahoo.comAugust 17, 2008When using any part of the article for publication or analytical materials reference to the author and Alpari is obligatory.
The Review of the Bigger Time-Frames(2-nd half of 2008)
In this article I tried to synchronize the supposed price movement of the currency pairs under consideration. Only one of a great number of possible scenarios is given here, but it is the most probable from my point of view at the moment.
1. EUR/USD and USD/CHF
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Figure 1. Wave counting on the monthly USDCHF chart.
The wave construction on the monthly chart of CHF may be classified as a global downward diagonal triangle (or a triple zigzag). If this is the case the price might break the lower generating line of the diagonal triangle. The area of possible projected values is plotted on the chart.
As the charts of EUR/USD up the year 1998 are synthesized it is logical to accept the mirrorlike pattern of CHF for this currency pair.
Supposedly at the moment the ending wave V of the global diagonal triangle is developing.
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Figure 2. Wave counting on the weekly USDCHF chart.
Supposedly wave 4 of (3) of which has approached the limited mark at 50% for the fourth waves of impulse is completing.
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Figure 3. Wave counting on the weekly EUR/USD chart.
EUR like a twin brother reflects mirrorlikely movements of CHF. Supposedly wave 4 of (3) of which has approached the limited mark of 50% for the fourth waves of impulse is completing.
A reversal of the price against the US dollar in the nearest 10 days and breach of confirmatory levels will be the confirmation of this scenario.
2. GBP/USDhttp://www.alpari-forex.com/files/pic/docs/11/31332_10747.gif
Figure 4. Wave counting on the monthly chart.
The recent deep decline of the pound and the breach of the critical level (refer to Figure 9 in the article The Review of the Bigger Time-Frames (II-nd quarter of 2008)) allow to consider the downward price movement as wave 2 of (C) of (refer to Figure i8 in The Review of Bigger Time-Frames (Annual Wave Analysis 2008)).
Possible projected values of the terminus of the supposed wave of x are plotted on the chart.
A reversal of the price against the US dollar in the nearest 10 days and then the breach of the confirmatory level will be the confirmation of this scenario.
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Figure 5. Wave counting on the daily chart.
Wave 2 itself supposedly has assumed the shape of a zigzag with approximately equal in length legs demonstrating the guideline of alternation for zigzags (refer to page 140 of my book).
Wave of 2 supposedly is a truncated triangle.
Note. In the terminology of R. Prechter triangles with three main waves or with disproportionately small ending waves (d) and (e) are called truncated triangles.
3. USD/JPYhttp://www.alpari-forex.com/files/pic/docs/11/31332_10749.gif
Figure 6. Wave counting on the monthly chart.
The wave construction on the monthly chart of the yen may be classified as a global downward impulse the ending wave of which is assuming the shape of a diagonal triangle. The area of possible projected values is plotted on the chart.
If price passes the confirmatory level it will be the confirmation of this scenario.
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Figure 7. Wave counting on the daily chart.
At the moment the wave counting doesn’t rule out that wave is completed in the form of a triple zigzag. But this supposition requires confirmation.
Note
Given possible trading plans are purely informational purpose only and they should not be considered as trading guides or an invitation to make a transaction.
Reference
[*]The review of the bigger Time-Frames (Annual Wave Analysis, 2008) [*]EUR/USD (Annual Wave Analysis, 2008)[*]GBP/USD (Annual Wave Analysis, 2008)[*]USD/JPY (Annual Wave Analysis, 2008)[*]USD/CHF (Annual Wave Analysis, 2008)[*]Monthly Wave Analysis, August 2008[*]EUR/USD, Monthly Wave Analysis, August 2008[*]GBP/USD, Monthly Wave Analysis, August 2008[*]USD/JPY, Monthly Wave Analysis, August 2008[*]USD/CHF, Monthly Wave Analysis, August 2008[*]The review of the bigger Time-Frames (II quarter of 2008)[*]Variety of variants for GBP/JPY [*]A rare form of zigzag (EURJPY)[*]Wave Analysis[*]Methods of Price Movement Projection (EWA)[*]How to Apply EWA ForecastsDmitry Voznuy
forDmitry@yahoo.comAugust 14, 2008When using any part of the article for publication or analytical materials reference to the author and Alpari is obligatory.
A rare form of zigzag (EURJPY)
At the end of May the article Horizontal triangle — is it a reversal or continuation pattern?, in which the cross rate EUR/JPY was analyzed, was released. It was supposed that a downward wedge formed from the top of the global uptrend which suggests further development either of a downward impulse (as a part of zigzag structure), or a downward zigzag.
But the price broke the critical level having placed in doubt the accepted scenario. In this case it remains either to return to the February variant of wave counting in which global double zigzag was considered (refer to Figure 1 below), or to give reasons for a new variant.
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Figure 1. February scenario for EUR/JPY.
Actually if we consider the double zigzag -- on the monthly time-frame (refer to the February article System of equations with an endless number of solutions ), we may suppose that wave (B) of is assuming the shape of a skewed triangle.
At the same time if we analyze this knot on smaller time-frames the impulsive structure of wave C of (B) of which supposedly is a wedge is a strong argument against this scenario (refer to Figures 3 and 4 below).
It is necessary to make a small excursive here.
Zigzag is the most commonly encountered corrective wave pattern on the FX market.
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Figure 2. An ideal zigzag.
An ideal zigzag is a pattern with formula 5-3-5, it supposes approximate equality of legs A and C, and wave-link B equal by depth to 25%..78% of wave A (average value = 39%).
At the same time on the real market sometimes one may encounter variations of this pattern which are zigzags by internal structure while by external form they may remind an expanded flat (i.e. the terminus of wave B goes beyond the beginning of wave A and constitutes 100%..127% of wave A). I believe that in such cases the internal structure not the external form of the pattern under consideration is the determining factor.
I gave several real examples of such variations of zigzag as early as in 2004 (refer toMonthly-0604), and in my book (refer to Figure 3-43). In all these cases the wedge pointed to the direction of further development of the trend.
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Figure 3. A variant of wave counting on the daily EUR/JPY chart.
That’s why it isn’t ruled out that in this case we observe forming of a rare variation of zigzag A-B-C, when the terminus of wave B went beyond the beginning of wave A. The fact that the uptrend after the wedge has an explicit corrective structure –zigzag at the moment may be an additional argument in the favor of this supposition. Not only internal structure of this pattern 5-3-5, but approximate equality of its leg, retracement of wave of B 49%, and compliance with the guideline of alternation for zigzag (refer to page 140 of my book) point to this.
The completion of wave B below the 172 mark (127% of wave A) and further development of downtrend (wave C) in impulsive mode will be the confirmations of this scenario.
If the supposed zigzag -- of B transforms into an impulse or the price fixes above the new critical level (171.92) this scenario will have to be reconsidered.
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Figure 4. A variant of wave counting on the weekly EUR/JPY chart.
In such a case the scenario considered in the article Horizontal triangle — is it a reversal or continuation pattern? two months ago remains actual up to date — the completed upward impulse or with the truncated fifth 5 of (5). At the moment this very pattern combines optimally all the data and interlinks the wave patterns of minor wave degrees. But the variant with a possible skewed triangle though relegated to the background isn’t cancelled.
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Figure 5. A variant of wave counting on the monthly EUR/JPY chart.
If the supposition is true the truncated fifth 5 of (5) and the extension in the fifth wave (5) of warn insistently about possible impressive price decline while downward wedge A of and almost completed zigzag B of may point to the beginning of the supposed decline in the immediate future.
Addition of September 5, 2008http://www.alpari-forex.com/files/pic/docs/12/31072_11258.gif
Figure 6. Wave counting on the daily EUR/JPY chart.
The forecast on the cross rate is confirmed a hundred per-cent so far.
Note
Given possible trading plans are purely informational purpose only and they should not be considered as trading guides or an invitation to make a transaction.
Reference
[*]The review of the bigger Time-Frames (Annual Wave Analysis, 2008) [*]EUR/USD (Annual Wave Analysis, 2008)[*]GBP/USD (Annual Wave Analysis, 2008)[*]USD/JPY (Annual Wave Analysis, 2008)[*]USD/CHF (Annual Wave Analysis, 2008)[*]Monthly Wave Analysis, July 2008[*]EUR/USD, Monthly Wave Analysis, July 2008[*]GBP/USD, Monthly Wave Analysis, July 2008[*]USD/JPY, Monthly Wave Analysis, July 2008[*]USD/CHF, Monthly Wave Analysis, July 2008[*]The review of the bigger Time-Frames (II quarter of 2008)[*]Variety of variants for GBP/JPY [*]Wave Analysis[*]Methods of Price Movement Projection (EWA)[*]How to Apply EWA ForecastsDmitry Voznuy
forDmitry@yahoo.comJuly 19, 2008When using any part of the article for publication or analytical materials reference to the author and Alpari is obligatory.
Variety of variants for GBP/JPY
Introduction
I divided the article on EUR/JPY and GBP/JPY into two parts due to its large volume. The first part was released yesterday (refer to the article Horizontal triangle — is it a reversal or continuation pattern? (EUR/JPY)).
Today we will consider the currency pair GBP/JPY.
On the monthly chart we can see a pair of successive and approximately equal upward impulses that formed after the all-time bottom at 129.37 reached in 1995 (refer to Figures 1..3).
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Figure 1. Global upward wedge GBP/JPY.
These global impulses may be a part of upward wedge ----, the fourth wave of which is forming at the present. The fourth wave itself may assume the shape of elementary zigzag but as a rule fourth waves assume a more complicated form.
In this case it is quite natural to expect the completion of the fourth wave near the 180 mark or lower with the subsequent upward reversal of the global trend for forming of a large wave . The critical level for this scenario is the ending of the supposed wave .
By now a downward zigzag has formed from the top that theoretically can be wave entirely (refer to the alternate variant of counting at the bottom of the chart). But taking into consideration its disproportionately small sizes we may with high probability consider it only a part of the downward impulse (A) of .
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Figure 2. Global zigzags GBP/JPY.
On the other hand after a durable price decline in an impulsive mode and all-time bottom (wave a), a pair of successive upward impulses can be interpreted as 12-year pause — a large zigzag --, that forms wave b of the global downward zigzag a-b-c. In this case we may expect further price decline in the form of an impulse or a diagonal triangle (wave c).
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Figure 3. Global zigzag GBP/JPY.
Then the downward impulsive structure that has formed by the moment after the completion of wave b may be considered either a part of impulse of c (in case wave c forms in the shape of an impulse) or a part of the first leg (A) of zigzag (in case wave c forms in the shape of a diagonal triangle).
According to this scenario we should expect the price decline to the 120 mark and lower. The ending of the supposed wave b is the critical level for this scenario.
At any rate but since July of the last year a large downward impulse has been forming from the 251.07 mark and the most important task now is to determine its projected sizes. In the framework of this task it doesn't matter in the least which of the global scenarios should be considered the main and which of them is the alternate one. In order to avoid confusion in the variety of counting variants the number of which increases at an exponential rate the smaller the time-frame is, I will consider the scenario in Figure 1 to be the main (with the upward wedge).
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Figure 4. Wave counting on the daily chart of GBP/JPY.
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Figure 5. Wave counting on the weekly GBP/JPY chart. Main variant.
The most simple variant of counting of the impulse (A) doesn’t rule out that its fourth wave 4 of (A) is forming now that may complete near the 210 mark (refer to Figures 4 and 5). The following arguments support this value:
[*]38% depth of the expected correction (Fibonacci level),[*]observation of guideline of alternation by the depth of corrections 2 of (A) and 4 of (A),[*]the area of the previous wave four of 3 of (A),[*]strong resistance level.But before the price rises to the 210 level it must complete the downward zigzag (a)-(b)-(c) of of 4, perhaps in the area of the ending of wave 3 (A).
In this case it makes sense to project the ending of wave 5 of (A) only after the completion of wave four 4 of (A). If we speak about possible shape of wave four itself so far only one thing is clear — it won’t be a zigzag. But there is one less probable variant when double zigzag (w)-(x)-(y) of may prove to the entire wave 4 of (A). But then the duration of wave 4 of impulse (A) will be less than the duration of its wave 2, that occurs not so often on the FX market.
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Figure 6. Wave counting on the daily GBP/JPY chart. Alternate variant.
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Figure 7. Wave counting on the weekly GBP/JPY chart. Alternate variant.
The alternate scenario for impulse (A) doesn’t rule out that at the moment only wave 3 of (A) completes forming and only after that correction 4 of (A) will begin (refer to Figures 6 and 7).
If this is so the price decline in the impulsive mode below the 190 mark is expected in the nearest future. The area of projected values for the ending of wave 3 of (A) is in the range 189.95..183.54 (176.56).
The critical level for this scenario is the ending of wave of 3 of (A).
In spite of the variety of possible variants both in the main scenario and in the alternate one the nearest expected price movement is downward. Further forming of the wave structure of impulse (A) may suggest the most probable scenario.
Addition of July 21, 2008In the framework of the accepted scenario for the cross rate GBP/JPY the supposed wave 4 of (A) continues forming. Here the current wave counting is specified.
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Figure 8. Wave counting on the weekly GBP/JPY chart.
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Figure 9. Wave counting on the daily GBP/JPY chart.
At the moment wave 4 of (A) has fulfilled the minimal requirements to the fourth waves of an impulse:
[*]the price has almost completed forming of the supposed zigzag -- of 4,[*]it crossed the upper border of the trend channel,[*]it has approached the 50% mark (limit value for the fourth waves of an impulse),[*]MACD 5-34-5 has practically crossed the zero line.In this case the downward reversal of the local trend and the continuation of the price decline in the impulsive mode are quite possible.
Addition of September 5, 2008http://www.alpari-forex.com/files/pic/docs/12/30594_11259.gif
Figure 10. Wave counting on the daily GBP/JPY chart.
The forecast on the cross rate is fully confirmed.
Note
Given possible trading plans are purely informational purpose only and they should not be considered as trading guides or an invitation to make a transaction.
Reference
[*]The review of the bigger Time-Frames (Annual Wave Analysis, 2008) [*]EUR/USD (Annual Wave Analysis, 2008)[*]GBP/USD (Annual Wave Analysis, 2008)[*]USD/JPY (Annual Wave Analysis, 2008)[*]USD/CHF (Annual Wave Analysis, 2008)[*]Monthly Wave Analysis, May 2008 [*]EUR/USD, Monthly Wave Analysis, May 2008 [*]GBP/USD, Monthly Wave Analysis, May 2008 [*]USD/JPY, Monthly Wave Analysis, May 2008 [*]USD/CHF, Monthly Wave Analysis, May 2008 [*]The review of the bigger Time-Frames (II quarter of 2008)[*]One of the possible scenarios for USD/CAD[*]Horizontal triangle — is it a reversal or continuation pattern? (EUR/JPY)[*]Wave Analysis[*]Methods of Price Movement Projection (EWA)[*]How to Apply EWA ForecastsDmitry Voznuy
forDmitry@yahoo.comMay 24, 2008When using any part of the article for publication or analytical materials reference to the author and Alpari is obligatory.
Horizontal triangle – is it a reversal or continuation pattern? (EUR/JPY)
From the point of view of the classical technical analysis after the consolidation of the price in the form of a triangle the trend always continues in the preceding direction. From the point of view of the wave analysis after a corrective wave in the form of a horizontal triangle the price always forms the ending actionary wave of a pattern of a greater degree in the direction of actionary waves of this pattern. The both types of analysis of the financial markets unanimously say that the horizontal triangle is a reversal pattern.
The question is when a horizontal wave structure is forming how to determine if this is a consolidation or not, a triangle or not, if the trend will continue further or will reverse in the opposite direction. The price of the question increases when we speak about large time-frames (for example on monthly and weekly charts).
Here is a small example from not-so-distant past.
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Figure 1. One of the variants of wave counting of EUR/USD released by EWI in April 2002.
From the beginning of 2001 and to the end of 2002 such experts in the wave analysis as the team of R. Prechter (the president of Elliott Wave International — EWI), didn’t rule out forming of wave four (4) of the downward impulse on the weekly chart of EUR/USD in the form of a horizontal triangle expecting the ending shoot down of the price after its completion.
Indeed in the process of forming of this horizontal structure especially in its first half the whole construction resembled a contracting triangle, i.e. the most probable wave pattern in the position of the fourth wave of an impulse. But later after the completion of the supposed wave C of (4), when the triangle formed more than by half, its sizes exceeded noticeably the sizes of the adjacent waves of the downward global impulse that must have placed in doubt the accepted scenario.
From the point of view of the classical technical analysis the construction remained a hundred-per-cent triangle and after its completion further price decline should have been expected.
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Figure 2. One of the variants of wave counting of EUR/USD released by EWI in November 2002.
By the end of 2002 when the price distorted the geometry of the supposed triangle and went up everybody understood that the variant with a horizontal triangle «croaked». The scenario with the truncated fifth (5) of and a more proportional wave (4) of became the new accepted variant (refer to Figure 2).
That’s why during the ending stage of forming of an extended horizontal construction it is desirable to estimate the maximum number of initial parameters in order to find the most probable solution:
[*]the internal structure of the main waves of the forming pattern,[*]the survey wave counting on the larger time-frames,[*]the correlation of the main waves in patterns by their length and duration,[*]if the price moves within the trend channel or out it moves out of it ,[*]the forecasted price movement of adjacent or dependent currency pairs,[*]proximity of the price to the critical or confirmatory levels,[*]signals of additional indicators,[*]for such large time-frames as monthly and weekly it is desirable to take into consideration fundamental indicators.The cross pair EUR/JPY suits well as an example for considering a similar case not on historical data but on a real time basis.
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Figure 3. The weekly chart of EUR/JPY in February 2008.
That’s how the weekly chart of EUR/JPY looked like in February 2008. And the wave structure of the global upward impulse and the top as the beginning of the correction were projected precisely and in advance in April 2007 (the error of determining of the top that formed in July was only 67 points, refer to the article Never-ending Ascension (EUR/JPY)).
Analysis of the developing horizontal structure in February 2008 let us suppose that a half of the extended correction was formed, perhaps in the form a horizontal contracting triangle. But considerable final sizes of this triangle didn’t let consider it to be the fourth wave of an upward impulse though this very scenario was considered as the most probable in 2007 in the articles Never-ending Ascension (EUR/JPY) and EUR/JPY, GBP/JPY. This triangle was too big in comparison with the adjacent waves that formed the global upward impulse.
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Figure 4. The wave counting draft on the monthly EUR/JPY chart in February 2008.
That’s why in February 2008 the double zigzag pattern where the supposed correction was presented in the form of the forming horizontal triangle (B) of was taken as a draft variant of the wave counting of the upward section of the monthly chart of EUR/JPY (refer to the article System of equations with an endless number of solutions ).
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Figure 5. The EUR/JPY weekly chart at the present.
And that’s how the weekly chart of EUR/JPY looks like now. From the point of view of the classical analysis a hundred-per-cent horizontal triangle is forming after which further upward movement should be expected.
If we analyze new data from the point of view of the wave analysis the picture suffered a number of considerable changes that lets us specify the counting not only of the last horizontal section of EUR/JPY, but of the whole global pattern (refer to Figure 6..8, below).
Besides the mathematical modeling of the price movement of several currency pairs for 2008-2009 years implemented on the last data (they aren’t given here), rules out upward movement of EUR/JPY above the 168 mark before the price reaches the 140 mark. To what extent this supposition is true we will see relatively soon, but at the present it is true only on condition that forecasts of movements of the dependent currency pairs (EUR/USD and USD/JPY), considered on an ongoing basis in «Wave analysis» are true.
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Figure 6. The wave counting draft on the EUR/JPY daily chart.
First of all the central pattern of the horizontal construction under consideration in the course of the last 3 months was supplemented by a downward impulse (wave of 1 in Figure 6), that supposes not a horizontal correction but downward movement in the form of a wedge 1 or A.
The wedge 1 itself and the construction situated to the right of it are the wave sequence 1-2, 1-2, of decreasing wave degrees.
Five-wave pattern situated to the left of the wedge 1, can be easily counted in the form of upward impulse 5 of (5) with a truncated fifth wave of 5 of (5), which itself is a truncated fifth 5 of (5).
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Figure 7. The wave counting draft on the EUR/JPY weekly chart.
In spite of the fact that the fourth wave 4 of (5) is much longer than the second wave 2 of (5) it doesn’t go to the territory of the first wave 1 of (5). Besides MACD 5-34-5 confirms the correctness of the accepted counting of impulse (5) of .
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Figure 8. The wave counting draft on the EUR/JPY monthly chart.
In this case on the monthly chart we get a completed upward impulse or with a truncated fifth 5 of (5). At the present this very pattern unites optimally all the data and interlinked wave patterns of smaller wave degrees. But the variant with a possible horizontal triangle isn’t cancelled for good though it is relegated to the background.
If the supposition is true the truncated fifth 5 of (5) and the extension in the fifth wave (5) of insistently warn about possible impressive price decline while the downward wedge 1 of says the downtrend has begun already (supposedly wave may assume the shape of a zigzag (A)-(B)-(C)).
Of course this supposition requires its confirmation (the critical and confirmatory levels are plotted on the chart).If the wave picture changes or the critical levels are broken the current scenario will have to be reconsidered.
Read the continuation in the article A rare form of zigzag (EURJPY).
Note
Given possible trading plans are purely informational purpose only and they should not be considered as trading guides or an invitation to make a transaction.
Reference
[*]The review of the bigger Time-Frames (Annual Wave Analysis, 2008) [*]EUR/USD (Annual Wave Analysis, 2008)[*]GBP/USD (Annual Wave Analysis, 2008)[*]USD/JPY (Annual Wave Analysis, 2008)[*]USD/CHF (Annual Wave Analysis, 2008)[*]Monthly Wave Analysis, May 2008 [*]EUR/USD, Monthly Wave Analysis, May 2008 [*]GBP/USD, Monthly Wave Analysis, May 2008 [*]USD/JPY, Monthly Wave Analysis, May 2008 [*]USD/CHF, Monthly Wave Analysis, May 2008 [*]The review of the bigger Time-Frames (II quarter of 2008)[*]One of the possible scenarios for USD/CAD[*]Wave Analysis[*]Methods of Price Movement Projection (EWA)[*]How to Apply EWA ForecastsDmitry Voznuy
forDmitry@yahoo.comMay 27, 2008When using any part of the article for publication or analytical materials reference to the author and Alpari is obligatory.
One of the possible scenarios for USD/CAD
The wave counting of the currency pairs under consideration doesn’t rule out the beginning of a new stage of the dollar’s weakening this week (refer to The review of the bigger Time-Frames (II quarter of 2008)). According to the wave counting it is possible that the Canadian dollar outpaces them by the whole month and is forming the first waves of a new downtrend.
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Figure 1. Wave counting on 360 min chart.
At the moment the Canadian dollar has formed an interesting knot which can be interpreted as initial waves of a downward wedge. This supposition isn’t confirmed yet but if this happens the movement of USD/CAD will be almost synchronous with the expected new stage of the US dollar weakening in the currency pairs under consideration.
Critical levels for this scenario are the beginning of the supposed wedge and the ending of its wave of 1. Besides the third wave of the wedge of 1 proved to be shorter than its first wave of 1, that supposes the fifth wave of 1 will be even shorter. If price falls in a motive mode after corrective wave 2 it will be the confirmation of this scenario.
As an alternate it is quite natural to suppose that a sequence of downward waves 1-2, 1-2 is developing. If the downward impulse that is forming at the moment on this time-frame completes below the 0.9927 mark a switch to this scenario will become possible.
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Figure 2. Wave counting on the daily chart.
Any forecast remains sensitive until it is confirmed. Thus a perspective supposition of the beginning of a new stage of the US dollar weakening is only one of the possible scenarios and requires its confirmation.
Arguments in the favor of this scenario is the fact that the uptrend since the end of the last year is of rather corrective than impulse nature and may be interpreted as a completed double three W-X-Y of (2). Both the truncation of the double three and the forming downward wedge may speak of the strength of the downtrend.
But market is market and in case if the price breaks the critical level it is possible that the upward correction will continue in the shape of a double or triple zigzag.
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Figure 3. Wave counting on the weekly chart.
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Figure 4. Wave counting on the monthly chart.
If the supposition of the beginning of a new stage is confirmed the USD/CAD may decline as it is shown in Figures 3 and 4, almost synchronously with the currency pairs under consideration EUR/USD, GBP/USD, JPY/USD and USD/CHF (refer to the article The review of the bigger Time-Frames (II quarter of 2008)).
Thus at the moment the wave structure considered in Figures 1 and 2 signals possible beginning of a new stage of the decline in the currency pair USD/CAD. At the same time this supposition isn’t confirmed by the price yet.
Addition of May 7, 2008http://www.alpari-forex.com/files/pic/docs/10/30330_9088.gif
Figure 5. Wave counting on 360 min chart.
Changes of the wave counting for the last 10 days let us specify significant levels.
In order that the supposed wedge 1 correspond to the rules of EWA its wave of 1 must touch or cross the confirmatory level 0.9986. At the same time the price mustn’t break the critical level 0.9955 (this is the updated value of the critical level as the ending of wave of 1 was corrected).
Otherwise the stockade of waves that has been forming since the end of March 2008 can be interpreted as the wave sequence 1-2, 1-2 of decreasing wave degrees (refer to the alternate counting at the bottom of the chart).
If the price breaks the upper critical level 1.0324 further forming of the corrective wave (2) should be expected.
Addition of May,16http://www.alpari-forex.com/files/pic/docs/10/30330_9256.gif
Figure 6. Wave counting on 360 min chart.
In spite of some clumsiness of the ending wave of 1 it isn’t ruled out that the initial diagonal triangle 1 (wedge) is completing.
In order that the supposed wedge 1 correspond to the rules of EWA its wave of 1 mustn’t break the critical level at 0.9955. Otherwise the stockade of waves that has been forming since the end of March 2008 may be interpreted as the wave sequence 1-2, 1-2 of decreasing wave degrees (refer to the alternate counting at the bottom of the chart).
If the price breaks the upper critical level at 1.0324 further forming of the corrective wave (2) should be expected.
Addition of May,19http://www.alpari-forex.com/files/pic/docs/10/30330_9286.gif
Figure 7. Wave counting on 180 min chart.
A wish to find the optimal counting of the construction that has been developing since the beginning of April has led to the variant given in the Figure.
The fourth wave of the supposed wedge can be easily presented in the form of a double three the intermediate waves of which are expanded flats (-- of b of (x) of and a-b-c of (x) of ). The complexity of this knot confirms indirectly that this is the fourth wave.
Besides the depth of the corrective waves and corresponds to guidelines for wedges (refer to page 186 of my book), which is an additional argument in the favor of my variant.
In this case the ending wave of wedge 1 turns to be a diagonal triangle — a most singular phenomenon! Let me quote remarks from pages 186-187 of my book:
«Remark. Theoretically the fifth wave of the edge may be a diagonal triangle, but I haven’t come across such a case on the Forex market. Moreover some foreign authors deny such a possibility though without cause.»
If the supposition is confirmed this case will take its place in the bank of rare patterns.
As the third wave (iii) of turned to be shorter that the first wave (i) of , the critical level for the diagonal triangle of 1 is 0.9929 mark.
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Figure 8. Wave counting on 360 min chart.
If the supposition about forming of a downward wedge (or the wave sequence 1-2, 1-2) is true the local strengthening of the US dollar is expected until the end of the week (the rise of USD/CAD) .
If the price breaks the upper critical level at 1.0324 forming of the corrective wave (2) should be expected.
Addition of May, 20http://www.alpari-forex.com/files/pic/docs/10/30330_9308.gif
Yestrerday’s price decline below 0.9929 makes me modify the counting of the ending diagonal triangle , leaving the core of the general wave counting intact..
Taking into consideration the fact that the third wave of the wedge of 1 is shorter than its first wave of 1, and the third wave of the diagonal triangle (iii) of is shorter than its first wave (i) of , the critical levels for these patterns were determined. They coincided in a remarkable manner and the critical level 0.9889 is the last defense line for this scenario. Besides if the wedge pattern is confirmed it will be a unique wedge with the ending wave in the form of a diagonal triangle (refer to Remark at page 186 of my book).
At the moment the price has approached closely the critical level but the fact that the price touched the lower forming line of the wedge 1 gives good chances for the price bounce up in the nearest term. If the supposition about forming of a downward wedge (or the wave sequence 1-2, 1-2 in case of a deep break of 0.9889 level) is true, the local strengthening of the US dollar is expected until the end of the week (the rise of USD/CAD).
If the price breaks the upper critical level at 1.0324, further forming of the corrective wave (2) should be expected.
Reference
[*]The review of the bigger Time-Frames (Annual Wave Analysis, 2008) [*]EUR/USD (Annual Wave Analysis, 2008)[*]GBP/USD (Annual Wave Analysis, 2008)[*]USD/JPY (Annual Wave Analysis, 2008)[*]USD/CHF (Annual Wave Analysis, 2008)[*]Monthly Wave Analysis, April 2008 [*]EUR/USD, Monthly Wave Analysis, April 2008 [*]GBP/USD, Monthly Wave Analysis, April 2008 [*]USD/JPY, Monthly Wave Analysis, April 2008 [*]USD/CHF, Monthly Wave Analysis, April 2008 [*]Imaginary Skewer [*]Let's Analyze Zigzag Wave Construction[*]The Impulsive Decline of the Dollar as One of the Possible Scenarios[*]System of equations with an endless number of solutions [*]USD. A pause or the end of a black streak?[*]The review of the bigger Time-Frames (II quarter of 2008)[*]Wave Analysis[*]Methods of Price Movement Projection (EWA)[*]How to Apply EWA ForecastsDmitry Voznuy
forDmitry@yahoo.comApril 28, 2008When using any part of the article for publication or analytical materials reference to the author and Alpari is obligatory.
The review of the bigger Time-Frames (II quarter of 2008 )
In The review of the bigger Time-Frames (Annual Wave Analysis, 2008) three most probable scenarios of the supposed price movement of major currency pairs were considered. For the first three months the wave picture has changed that allows to correct the current variants of wave counting and to change preferences among the accepted variants.
I. European mirror twins EUR/USD and USD/CHF If we assume the first active wave of a correction as 100%, and the following main wave of a correction will be longer than the first one (> 100%), then the second wave may be called external retracement according to the terminology of Robert C. Miner. Such a term is quite justified in wave analysis when we speak about some variants of corrections — for example about expanded flats and running triangles.
Such variant of correction for wave-link of V of a large zigzag was supposed in scenario v.1 for the euro and Swiss franc (refer to The review of the bigger Time-Frames (Annual Wave Analysis, 2008)). But at the moment the price has exceeded considerably the expected maximum level of external retracement (162%) and has reached limit values (~190%..210%, refer to Figures 1 and 2).
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Figure 1. External retracement of EUR/USD is more than 200%.
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Figure 1. External retracement of USD/CHF is about 200%.
In this situation scenario v.1 is relegated to the background though it isn’t cancelled yet. Variant v.3 becomes the most probable (refer to Figure 3).
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Figure 3. Wave counting on the USD/CHF monthly chart. Variant 3.
In the framework of scenario v.3 the ending leg of V of the last zigzag of global diagonal triangle is forming. The are of projective values for the completion of diagonal triangle USD/CHF lies below the forming line of contracting diagonal triangle and below the 0.85 mark.
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Figure 4. Wave counting on the USD/CHF weekly chart. Variant 3.
One of the possible variants of counting of the ending impulse of V of the Swiss franc supposes that at the present wave (3) of is forming. Fibonacci levels for its possible completion are marked on the chart.
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Figure 5. Wave counting on the EUR/USD weekly chart. Variant 3.
The euro’s chart is almost a mirror reflection. Wave (3) of is forming here as well. Fibonacci levels for its possible completion are marked on the chart. The area of projective values for the completion of impulse of V should be define more exactly after wave (4) of is completed.
Thus at the moment scenario v.3 considered previously seemed to be the most probable. It supposes further decline of the dollar for not less than 15..20 figures (the rise of EUR/USD and the decline of USD/CHF).
I would like to say once again that though scenario v.1 for the euro and Swiss franc has been relegated to the background it isn’t cancelled yet (refer to The review of the bigger Time-Frames (Annual Wave Analysis, 2008)).
II. USD/JPY The Japanese yen didn't stand back from the European currencies and crossed rather significant levels — 101.67 (the ending of wave of IV) and 101.23 (the ending of wave of IV), thus having distorted the geometry of global horizontal triangle (refer to Figure 6).
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Figure 6. Wave counting on the USD/JPY monthly chart. Variant 3.
It means cancellation of scenario v.1 and a switch to either scenario v.3 (refer to Figure 7) or to modified scenario v.1m, which supposes further forming of wave of IV in the form of an extended horizontal correction. Both scenarios were considered in detail in Wave Analysis (refer to The review of the bigger Time-Frames (Annual Wave Analysis, 2008) and the articleUSD. A pause or the end of a black streak?).
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Figure 7. Wave counting on the USD/JPY monthly chart. Variant 3.
In the framework of scenario v.3 global triangle IV is completed and at the moment the ending wave V of global downward impulse is forming.
Ideally the price must descend below the 79.78 mark (the ending of wave III). The nearest projective area of the ending of wave V (if this wave doesn’t decide to form an extension) lies in the range of 77..67.
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Figure 8. Wave counting on the USD/JPY weekly chart. Variant 3.
One of the possible variants of counting of the ending impulse V supposes that at the moment wave of V is forming. Fibonacci levels for its possible completion are marked on the chart. The area of projective values for the completion of impulse V should be defined more exactly after wave of V is completed.
Thus at the moment scenario v.3 considered previously seemed to be most probable. It supposes further dollar’s decline of not less than 15..20 figures (the decline of USD/JPY).
III. GBP/USD Unlike the previous currency pairs the British pound preserves possibility of further price movement according to any of the three scenarios considered previously (refer to The review of the bigger Time-Frames (Annual Wave Analysis, 2008)).
The main question for the pound at the moment is not the choice of possible scenario v.1, v.2 or v.3 but the confirmation of the completion or further developing of a large upward zigzag marked in Figure 9 as zigzag (A)-(B)-(C).
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Figure 9. Wave counting on the GBP/USD monthly chart.
If we suppose further dollar’s decline of not less than 15..20 figures in the currency pairs considered previously such a decline will necessarily affect the GBP/USD pair. And if this pair moves practically synchronously with the other pairs it may mean forming of the ending leg of zigzag (C) and forming of a zigzag with practically equal legs.
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Figure 10. Wave counting on the GBP/USD monthly chart. Variant 3.
Wave counting on the weekly time frame doesn’t rule out further dollar’s decline (the rise of GBP/USD) for 15..20 figures synchronously with the other currencies considered above. This is possible if we suppose that wave 4 of (C) in the form of an expanded wave flat has completed recently and at the moment first waves of the ending wave 5 of (C) are forming. The latter wave may assume the shape of an impulse or a diagonal triangle.
I consider such a scenario of the further dollar’s decline to be the most probable at the moment.
Reference
[*]The review of the bigger Time-Frames (Annual Wave Analysis, 2008) [*]EUR/USD (Annual Wave Analysis, 2008)[*]GBP/USD (Annual Wave Analysis, 2008)[*]USD/JPY (Annual Wave Analysis, 2008)[*]USD/CHF (Annual Wave Analysis, 2008)[*]Imaginary Skewer [*]Let's Analyze Zigzag Wave Construction[*]The Impulsive Decline of the Dollar as One of the Possible Scenarios[*]System of equations with an endless number of solutions [*]USD. A pause or the end of a black streak?[*]Wave Analysis[*]Methods of Price Movement Projection (EWA)[*]How to Apply EWA ForecastsDmitry Voznuy
forDmitry@yahoo.comMarch 29, 2008When using any part of the article for publication or analytical materials reference to the author and Alpari is obligatory
USD. A pause or the end of a black streak?
The dollar's decline last week formed an interesting wave picture that allows supposing the completion of the global decline of the US currency in the nearest future as one of the possible variants. Unfortunately this variant isn’t unique so far but it mustn’t be shrugged off.
At first we will consider the USD/JPY pair because of the critical situation for the current scenario v.1 there The review of the bigger Time-Frames (Annual Wave Analysis, 2008)].
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Figure 1. Wave counting on the weekly chart of USD/JPY. Variant 1.
On Friday price broke through the critical level 103.91that supposes a change of the scenario considered in detail in the article Possible trade with an excellent profit/risk correlation.
At the same time the scenario with a descending diagonal triangle C of (B) of remains possible if we make some small changes in its counting (refer to Figure 1, above).
The same price movement corresponds approximately to calculations set out in another article System of equations with an endless number of solutions .
But in this scenario correlations between waves are rather marginal next to critical than optimal. For example further forming of the downward diagonal triangle may break the critical level 101.67 (the ending of wave of IV).
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Figure 2. Wave counting on the monthly chart of USD/JPY. Variant 1.
In this case the geometry of the global triangle IV will be distorted and at the best case it will have to be transformed into a triple three. At the same time wave (B) of of the supposed zigzag of IV will go behind the beginning of the zigzag itself which is rather an exception than a rule for zigzags (refer to Figure 3-43 of my book).
All these facts relegate scenario v.1 given in the Figure and considered in to The review of the bigger Time-Frames (Annual Wave Analysis, 2008) to the background not canceling it so far.
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Figure 3. Wave counting on the daily chart of USD/JPY. Variant 1.
If we consider the price decline since the middle of the last summer from another point of view it isn’t ruled out that we face an almost completed ordinary zigzag which demonstrates not only optimal correlations of legs but alternation for zigzags as well (refer to page 140 of my book).
If the supposition is true then in the first place chances that price won’t break the critical level 101.67 increase in comparison with the previous scenario. In the second place this zigzag is an almost completed downward three which may be one of the main wave of the global horizontal triangle.
Thus if we consider this construction to be an almost completed zigzag (an only in this case!), the following scenarios become actual.
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Figure 4. Wave counting on the monthly chart of USD/JPY. Variant 1m.
The modified first variant v.1m doesn’t rule out that wave of IV of the global horizontal triangle IV is itself forming in the shape of a triangle (or a horizontal extended correction).
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Figure 5. Wave counting on the monthly chart of USD/JPY. Variant 1a.
Within the framework of the scenario v.1a wave IV is assuming the shape of a double three with a triangle as the ending wave of IV (refer to Figure 5-14 of my book).
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Figure 6. Wave counting on the monthly chart of USD/JPY. Variant 2.
The previous scenarios considered the forming large horizontal correction in the form of wave IV of a global downward impulse. But we must also take into consideration a variant when not an impulse but a global double/triple three is forming.
In such a case it isn’t ruled out that horizontal triangle of x is almost completed and a continuous strengthening of the US dollar should be expected in the near term.
In contrast to USD/JPY variant 1 for the European currencies The review of the bigger Time-Frames (Annual Wave Analysis, 2008))] isn’t at a critical pass and allows further dollar decline (it is considered in daily forecasts).
One of the quite possible variants of wave counting within the framework of scenario 1 doesn’t rule out that the global weakening of the US dollar is almost completed (refer to Figures 7..10, below).
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Figure 7. Wave counting on the weekly chart of USD/CHF. Variant 1.
If this wave counting is true a downward and rather proportional zigzag A-B-C of (B) of will complete in the near term. The weak point of this variant of wave counting is the fact that wave of C isn’t so long is it was expected earlier (its length is a little bit less than the length of wave of C).
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Figure 8. Wave counting on the weekly chart of EUR/USD. Variant 1.
Similar considerations refer also to the EUR/USD pair, which is a practically mirror twin of USD/CHF.
If this wave counting is true a downward and rather proportional zigzag A-B-C of (B) of will complete in the near term. The weak point of this variant of wave counting is the fact that wave of C, isn’t so long is it was expected earlier (its length is a little bit less than the length of wave of C).
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Figure 9. Wave counting on the monthly chart of USD/CHF. Variant 1.
The supposed wave of V itself of these currency pairs may assume different shapes within the framework of scenario 1 — from an extended wave flat with considerable strengthening of the dollar to an extended horizontal correction with more modest positions of the dollar.
But until the decline of the US dollar since the end of 2005 may be interpreted in the form of a completed impulse structure scenario v.2 for the euro and Swiss franc supposing the beginning of a global strengthening of the US dollar isn’t possible (refer to The review of the bigger Time-Frames (Annual Wave Analysis, 2008)).
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Figure 10. Wave counting on the weekly chart of GBP/USD. Variant 1.
The wave picture of the British pound allows both further weakening of the dollar and the beginning of its strengthening in the near term within the framework of scenarios v.1 and v.2 (refer to The review of the bigger Time-Frames (Annual Wave Analysis, 2008)). One of such variants is given in Figure 10. Variations of this scenario will depend on whether wave A of (E) has completed or not and on the depth of the supposed correction B of (E).
Thus the global strengthening of the dollar in the nearest future within the framework of scenario 2 considered in The review of the bigger Time-Frames (Annual Wave Analysis, 2008) at the moment is allowed only by the wave picture of GBP/USD and USD/JPY. While the beginning of a more modest strengthening of the US dollar in the nearest future within the framework of the accepted scenario 1 isn’t ruled out by all the considered currency pairs.
Addition as of 10.03.08 for USD/JPYhttp://www.alpari-forex.com/files/pic/docs/9/29850_8060.gif
Figure 11. Wave counting on the daily chart.
Last Friday the price broke through the critical level 101.67 and at once returned back. Let’s consider what consequences this may have for the further price movement.
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Figure 12. Monthly chart of USD/JPY.
Strictly speaking the geometry of a multimonth horizontal triangle is distorted as the price declined 27 pips below the previous ending of the main wave of the supposed triangle (though if constitutes only ~0.5% of the length of the first wave). At t he best case this triangle can be represented in the form of a triple three without changing the accepted scenarios. At the worst all the scenarios with this triangle should be reconsidered.
But the fact of a short-term breach of the critical level hasn’t changed the core of the last multimonth wave structure. It remains an extended horizontal correction regardless of how it is marked (A)-(B)-(C)-(D)-(E) or (W)-(X)-(Y)-(X)-(Z) (refer to Tables 3-1 and 3-2 of my book).
At the same time scenarios v.1 and v.1a prove to be open to question and are relegated to the background (refer to the article USD. A pause or the end of a black streak?).
While variants v.1m and v.2 remains valid so far (refer to the article USD. A pause or the end of a black streak?).
Besides taking into consideration unfavorable economic indicators for the dollar scenario v.3 gains weight The review of the bigger Time-Frames (Annual Wave Analysis, 2008)].
Reference
[*]The review of the bigger Time-Frames (Annual Wave Analysis, 2008) [*]EUR/USD (Annual Wave Analysis, 2008)[*]GBP/USD (Annual Wave Analysis, 2008)[*]USD/JPY (Annual Wave Analysis, 2008)[*]USD/CHF (Annual Wave Analysis, 2008)[*]Monthly Wave Analysis, January 2008 [*]EUR/USD (Monthly Wave Analysis, January 2008) [*]GBP/USD (Monthly Wave Analysis, January 2008) [*]USD/JPY (Monthly Wave Analysis, January 2008) [*]USD/CHF (Monthly Wave Analysis, January 2008) [*]Imaginary Skewer [*]Let's Analyze Zigzag Wave Construction[*]The Impulsive Decline of the Dollar as One of the Possible Scenarios[*]Possible Trade with an Excellent Profit-Risk Correlation System of equations with an endless number of solutions [*]Wave Analysis[*]Methods of Price Movement Projection (EWA)[*]How to Apply EWA ForecastsDmitry Voznuy
forDmitry@yahoo.comMarch 2, 2008When using any part of the article for publication or analytical materials reference to the author and Alpari is obligatory.
System of equations with an endless number of solutions
1. Setting a taskAs it is known price charts on the forex market show relative price of a currency against another currency. This is the main distinctive feature of the Forex market from other markets. That’s why the value of a currency pair at any moment can be represented as a product or quotient of at least two related pairs.
For example the pair EUR/JPY can be expressed in terms of the product of the two pairs: EUR/USD and USD/JPY:
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An example of interconnection between values of currency pairs.
Of course the market of EUR/JPY is an independent market but formation of price in the FOREX market is so structured that this formula is true practically at any moment of time.
Using this approach and having taken as basic data four main dollar pairs EUR/USD, GBP/USD, USD/JPY and USD/CHF, which I consider on the regular basis in Wave Analysis, we can set up the following system of equations:
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System of nonlinear equations
As a result we have got a system of six nonlinear equations and ten unknowns which in addition change in course of time. From a course in mathematics it is known that such a system at each moment of time has an endless number of solutions. That’s why a mechanical search of all possible variants is a senseless task. However if we set additional conditions or limitations for this system of equation the range of possible solutions will be reduced considerably.
Projections of wave patterns which are supposed to form at the rightmost edge of the chart can act as such limitations. In this case the problem takes on a definite sense as Elliott Wave Principle may hint not only the phase of the market in which we are at this or that moment of time, not only the shape of the supposed price movement but also targets based on known proportions of the main waves inside wave patterns.
Thus the main problem reduces to solving the following sub-problems:
[*]1) Determination of the additional boundary conditions of the currency pairs under consideration in the form of projections of the supposed price movement.[*]2) Determination of the key moments of time when the supposed wave patterns complete (the market’s phase).[*]3) Search of possible solution for the given system of equations at each key moments of time and within the framework of the accepted limitations.2. Determination of boundary conditions and key moments of time The analysis of the wave picture of the currency pairs under consideration on the bigger time-frames allowed to single out three main scenarios of the possible price movement.
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Figure 1. Local correction and the subsequent completion of the previous trend.
In the first case the previous long-term trend is broken by a forming local correction. After its completion the nearest completion of the trend itself isn’t ruled out. Such pairs as EUR/USD and EUR/GBP (upward trend), and also USD/CHF and GBP/CHF (downward trend) can be referred to this scenario.
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Figure 2. Large correction and the subsequent continuation of the previous trend.
In the second case a long-term trend is broken by a large horizontal correction the duration of which may be considerably longer than in the first case. After the correction completes the continuation of the previous trend should be expected. Such currency pairs as EUR/JPY and CHF/JPY can be referred to this scenario.
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Figure 3. Perhaps a new trend is marked. Local correction within its framework.
And the third scenario doesn’t rule out that a new trend has started and is developing within the framework of which a local correction is forming. Such currency pairs as GBP/USD, EUR/CHF, GBP/JPY and perhaps USD/JPY (this pair will be considered separately) can be referred to this scenario.
These scenarios and the key pulse points have determined the key moments of time where the completion of this or that wave pattern is expected. The optimal moments of time proved to be: the middle of March 2008, the second half of April 2008, the middle of summer and the beginning of autumn 2008, and the middle of the 2009 year.
At these five points of time search of appropriate solutions for our system of six nonlinear equations was implemented. And this very process took most of time spent for preparation of this article.
The calculation results are given in the following section. In spite of the fact that there are one-to-one relations between all the actual values one shouldn’t forget that this scenario is only one of possible scenarios though rather probable from my point of view.
3. The result of the solution of the system of equations at the key moments of time The results of calculations are rounded off while their actual values are shown below each chart.
3.1. Local correction and the subsequent completion of the previous trend.
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Figure 4. One of the possible variants of EUR/USD price movement
1.48, 1.43, 1.52, 1.52, 1.38.
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Figure 5. One of the possible variants of EUR/GBP price movement.
0.75, 0.74, 0.77, 0.76, 0.74.
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Figure 6. One of the possible variants of USD/CHF price movement.
1.1, 1.14, 1.05, 1.05, 1.2.
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Figure 7. One of the possible variants of GBP/CHF price movement.
2.17, 2.19, 2.07, 2.09, 2.24.
3.2. Large correction and the subsequent continuation of the previous trend.
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Figure 8. One of the possible variants of EUR/JPY price movement.
162.8, 161.6, 156.6, 156.6, 173.9.
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Figure 9. One of the possible variants of CHF/JPY price movement.
100, 99.1, 98.1, 98.1, 105.
3.3. New trend. Local correction within its framework.
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Figure 10. One of the possible variants of GBP/USD price movement.
1.97, 1.92, 1.97, 1.99, 1.87.
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Figure 11. One of the possible variants of EUR/CHF price movement.
1.63, 1.63, 1.6, 1.6, 1.66.
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Figure 12. One of the possible variants of GBP/JPY price movement.
216.7, 217, 202.9, 205, 235.6.
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Figure 13. One of the possible variants of USD/JPY price movement.
110, 113, 103, 103, 126.
4. Conclusion.The calculation results in the European currency pairs coincided in whole with the forecast for the 2008 year, considered in detail at the beginning of the year (refer to The review of the bigger Time-Frames and Figures 14..16, below).
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Figure 14. EUR/USD forecast for 2008. Variant 1.
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Figure 15. GBP/USD forecast for 2008. Variant 1.
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Figure 16. USD/CHF forecast for 2008. Variant 1.
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Figure 17. USD/JPY forecast for 2008. Variant 1.
But if we compare the calculated chart of USD/JPY (Figure 13, above) with the weekly chart in Annual-08 or with the chart in the article Possible trade with an excellent profit/risk correlation, the latest calculations insistently point to possible further forming of the supposed downward diagonal triangle C of (B) of .
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Figure 18. Possible variant of the continuation of diagonal triangle C of (B) of .
A possible variant of counting for this case is given in Figure 18. If the supposition proves to be true long positions opened in accordance with the recommendations in the article Possible trade with an excellent profit/risk correlation, should be closed as soon as the first target 113 is reached (refer to Figure 2, in the above-mentioned article ).
The wave counting of the JPY cross –rates on the basis of the last calculations may look like that.
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Figure 19. EUR/JPY forecast for 2008.
After the historical day in 2000 the EUR/JPY pair may be forming an upward double zigzag divided by a large skewed triangle . If this is the case the calculated values (refer to Figure 8, above) coincide with possible projected values defined via the size of the first zigzag and the first leg (A) of of the second zigzag .
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Figure 20. GBP/JPY forecast for 2008 and further.
The GBP/JPY pair after the historical day in 1995 has formed supposedly a pair of upward impulse which can be considered as a completed zigzag or as a forming upward wedge.
In the first case one should expect a downward movement below the 140 mark. In the second case one should expect further downward correction to the area of the 180 mark with the subsequent trend reversal and forming of the ending upward impulse which will complete above the 260 mark.
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Figure 21. CHF/JPY forecast for 2008.
After the historical day in 2000 the CHF/JPY pair may have formed an upward zigzag which is close to its completion. If this is the case the calculated values (refer to Figure 9, above) coincide with possible projected values defined via the size of the first leg of the zigzag and the first wave (1) of of the second leg of the zigzag. Besides in this case it is reasonably to use the height of the supposed horizontal triangle (4) of for specifying the projection of the ending of wave (5) of , that also confirms the calculated values.
Thus This article is an attempt to solve quite a complicated problem that is to say to find an acceptable solution for a system of six nonlinear equations which have in an endless number of general solutions at each moment of time. To set additional limitations with the purpose of reducing the range of search wave analysis was used as well as the method of key pulse points.
Time will show to what extent this attempt will prove to be successful.
Reference
[*]The review of the bigger Time-Frames (Annual Wave Analysis, 2008) [*]EUR/USD (Annual Wave Analysis, 2008)[*]GBP/USD (Annual Wave Analysis, 2008)[*]USD/JPY (Annual Wave Analysis, 2008)[*]USD/CHF (Annual Wave Analysis, 2008)[*]Monthly Wave Analysis, January 2008 [*]EUR/USD (Monthly Wave Analysis, January 2008) [*]GBP/USD (Monthly Wave Analysis, January 2008) [*]USD/JPY (Monthly Wave Analysis, January 2008) [*]USD/CHF (Monthly Wave Analysis, January 2008) [*]Imaginary Skewer [*]Let's Analyze Zigzag Wave Construction[*]The Impulsive Decline of the Dollar as One of the Possible Scenarios[*]Possible Trade with an Excellent Profit-Risk Correlation [*]Wave Analysis[*]Methods of Price Movement Projection (EWA)[*]How to Apply EWA ForecastsDmitry Voznuy
forDmitry@yahoo.comFebruary 23, 2008When using any part of the article for publication or analytical materials reference to the author and Alpari is obligatory