NZD/USD update

This currency pair seems to have behaved as expected on the previous post. it seems likely that the iii(circle)rd wave down has terminated/ is terminating A wave iv(circle) bounce is expected that will most likely terminate at or bellow 0.8075 handle and will most likely be a zigzag/ contracting triangle. This is a perfect time to scale out some profits for those of you who are short this market, for those who are long and running a loss a move towards the 0.8075 would be a good place ro exit at a smaller loss.

Regards,
Ahmed Farghaly

GBP/USD & NZD/USD Elliott wave update

Looking at a weekly chart of the gbp/usd currency pair. It seems evident that the bearish contracting triangle was breached to the downside as anticipated earlier on this blog, I'm counting the initial decline as a wave 1 of a 5th wave or a wave A of wave 1 of a diagonal 5th wave. In all cases this currency pair is headed lower and will most likely take us towards the 1.25 handle not too long from now. In the following picture we will look at the initial decline in greater detail to aid us in timing the resumption of the declines to lower prices.

Posted above is 12 hour chart detailing the decline from the wave (E) high, as mentioned above it seems that the decline post the wave (E) high was impulsive a textbook 5 wave decline with an extended fifth wave. what occurred after seems to be a correction to the upside. Other than the pattern in formation a simple comparison with the decline from the wave (E) high would classify the move as corrective. It is slow and is moving sideways which are typical of corrective patterns. However looking at the pattern in formation it seems evident that the pattern is a zigzag rally to the upside. we are currently in the wave iii of C which suggests that this rally still has some legs in it before we can conclude that the correction is over. The blog will be updated when that occurs.

It seems likely the the advance on the NZD/USD from the 2000 low is that of a zigzag rally to the upside. The ending diagonal that took place in wave 5 of C would indicate that the upcoming decline would be of one degree higher than the diagonal typically several degrees higher which is why I'm labelling the whole move from the 2000 low as a zigzag an alternate would be a 1-2-i which seems unlikely again due to the diagonal triangle that occurred as the 5th wave. If the labelling is accurate this would indicate that the 2011 high marked the end of cycle degree bear market rally and the upcoming declines will prove very fruitful from a trading/investing perspective.

Posted above is the 4hr chart looking at the declines from the wave (2) high it seems evident that we are still in the iii(circle)rd wave down(notice how we took out the base channel as is typical of 3rd wave behaviour). we still have some further declines to go before we can label minor wave 1 complete. IF already short this market I would suggest holding on to the shorts for a while longer until this pattern proves complete.

Regards,
Ahmed Farghaly

EUR/GBP Elliott wave outlook

The image above shows my preferred count on this currency pair. The declines from the 2008 high seems corrective and we are most likely going to see the 2008 high breached eventually. The count presented above is of a double zigzag decline which concluded as of the 22 july low. A point to note is how the decline took us to the preceding 4th wave zone and rallied from there. It looks like we are rallying impulsively since. the impulsive wave still has one more leg to the upside to conclude as presented above. After which the advance will be labelled 1/A and we'll be looking to long on a corrective set back. But as for now I would suggest holding on to any longs from lower prices in anticipation of a 5th wave rally to new highs.

  This is my alternate count. It suggests that we are currently still in an (X) wave rally correcting wave (W). This is a bearish count and suggests further declines in this currency pair. However the wave (5) of C is still not complete yet which suggests one final higher high before this currency pair turns south.

Regards,
Ahmed Farghaly