Just about time to go Long EUR$. First target is 1.3804.

Am still long EUR$. If 1.3630 level is broken to the downside the wave count will require a re-assessment.

mnadii did you take a long position in gbp/usd on Monday.

OUTLOOK FOR WEEK 26TH - 30TH MAY, 2014

I hope you have had a wonderful week.

We are at very interesting junctures in EUR$, GBPUSD and USDJPY. I.e the pairs that I am having the pleasure of analysing as below. Criticisms are encouraged.

EUR$



It appears that waves [i] and [ii] are complete in the EUR$. Wave [ii] took the form of a zigzag ( i.e an impulse for (a), a triangle for (b) and an expanding ending diagonal for (c) ).

Wave (i) is from the 1.3734 high to 1.3615 low. It has taken a leading diagonal structure.

I expect a correction for wave (i) to be superquick and reach about 1.3689 level. Once this correction is over there should be a dramatic fall in the pair as wave (iii) down develops.

1.3734 level is our line in the sand and should not be broken to the upside.

SUMMARY:
Beginning Monday 26th, EUR$ should rally in a move that is not expected to reach 1.3734 level. The pair shld then drop sharply.

RECOMMENDED STRATEGY:
Going into early next week traders shl'd accumulate short positions with a Stop Loss level at 1.3734. NB. PLS note that diagonals are usually deeply retraced so the 78.6% retracement of wave (i) at 1.3708 may be reached.
Of course the higher the level at which you get in the better for your risk:reward.

USDJPY



In a previous post I may have spoken too early calling for a short in the $YEN pair but the opportunity should be at hand now.

From the 103.01 high the pair appears to have also traced out a leading diagonal to the 100.81 low. As expected, the correction has been quick slightly exceeding the 50% level at 101.91. Wave [A] is impulsive and [C] is an ending diagonal. For all intents and purposes wave ii, the correction for wave i (103.01 to 100.81), is complete at 102.00 level.

The outlook for next week is a BIG sharp drop ( there is likelihood for a gap down). It's possible for a move to 102.17 (the 61.8% retracement of wave i) also, but no more higher than that.

STRATEGY:

$YEN should be shorted at current levels i.e 102.00s. Depending on the gap, if it appears on Monday, the Stop Loss level shl'd be at 102.20 level. A big down move is expected.

GBP$



Another currency pair at a nice juncture.

Wave [3] is developing. So far we have a pair of developing impulse waves. i.e waves 1,2 and waves [i], [ii].

Wave i from the 1.6875 high to 1.6812 low is an impulse (It can be seen better if you look at it in 30 min Time Frame).

Wave ii is underway and may reach 1.6851 level ( being 61.8% of wave i ).

Key level is 1.6875 which should not be exceeded upward.

STRATEGY:
Sell the pair. Your Stop Loss is at 1.6875. A significant move down is expected.

UPDATE:

On GBP$ we were sightly in error about the labelling. Wave [i] seems to have been a leading diagonal as shown. The retracement, i.e wave [ii], failed at the 61.8% level. More downside expected.
It is also possible that the drop from 1.6920 high to current levels (1.6794) COULD be a leading diagonal. Any sharp rise in GBP$ at this point would confirm that this second scenario is the case. All the best.

101.68 level is key. If broken downside our bearish view will be confirmed.

Note that wave [A] = wave [C] at 81 pips each.

NB: $JPY 4 HR chart.

Minimum target for wave (iii) is 1.6654 being 1.618 X wave (i).

@mnandii: What are your thoughts on a AU long this morning? Planning to exit the trade by the end of the day, depending on price action.