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USDCAD: An impulsive reversal higher in the next week, back to 1.0200 would suggest another leg higher, this time to 1.0440 trend-line resistance where we would be looking for an end of a corrective wave (E) of X triangle as shown on the weekly chart.

Only sharp fall through 0.9930 would require a different outlook (ALT on the chart).

US and European stocks futures did not move much in the last few sessions so we will continue to look higher. We see room for further gains today as several market are still in fourth waves.

Critical/invalidation level is at 81.32 as wave 2) must never retrace more than 100% of wave 1). So as long that level holds we are looking higher.


What is Zig-Zag?

A zig-zag (Elliott Wave Pattern) is a 3-wave structure labeled A-B-C, generally moving counter to the larger trend. It is one of the most common corrective Elliott patterns.

EURUSD: Elliott Wave Principle Suggests to wait three wave pullback in abc to go short.

EURUSD fell sharply last week and closed well below 1.3034 swing low support which puts bearish price action in play. From an Elliott Wave perspective we are tracking one-two, one-two set-up with sub-wave (ii) now underway to 1.3020/50 resistance area.
EURUSD Intra-day


EURUSD Daily

USDJPY broke higher last week, out of a triangle pattern that we have been tracking it since mid-April. This triangle has been placed in wave four, so we must be aware of a bearish reversal in the next few days/weeks if we consider that this type of patterns occurs always prior to the final move of the larger trend. So current leg up should be our final leg then; most-likely wave 5 of an ending diagonal. However, each leg in ending diagonal should be sub-divided minimum by three waves so current pull-back is probably wave (b) with wave (c) yet to come that may hit 103.00/103.50 level. After a completed ending diagonal we will be looking for a sharp reversal lower. Fall back beneath 100 would be a first but important sign for completed ending diagonal and weaker prices ahead.

What Is Ending Diagonal?
An ending diagonal is a special type of pattern that occurs at times when the preceding move has gone too far too fast, as Elliott put it. A very small percentage of ending diagonals appear in the C wave position of A-B- C formations. In double or triple threes, they appear only as the final "C" wave. In all cases, they are found at the termination points of larger patterns, indicating exhaustion of the larger movement.

AUDUSD: Support for current decline could be near, maybe around 0.9800 from where we will be tracking a wave (iv) corrective rally.

EURUSD reversed slightly higher yesterday from 1.2840 support but not for long as recovery found resistance very soon, so it was probably just a fourth wave within larger wave 3 down.

GOLD reversed nicely, perfectly lower from 1490 area two weeks back where base channel turned into a resistance as discussed in our latest video analysis. Notice that fall from that zone is now very sharp, showing evidences of an increase in volume and momentum so we suspect that market is underway to 1220/1300 area for fifth wave of decline in wave (C).

USD-index is trading lower from recent highs which now appear to be start of a deeper corrective retracement. We are tracking wave 4) pull-back now as we can already count a completed five sub-waves in red wave 3). As such, current bearish waves are only temporary and should prove corrective. Ideally we will see three sub-waves down in wave 4 to 83.30-83.50 area where market may find a support; around former wave four, 38.2% Fibo level and at base channel.