FX Trading – Looks like some topping action, as in “US dollar correction”?
EURUSD Daily: (comments from yesterday’s CCPRO)
EURUSD Daily Wave Chart: This chart is bit convoluted, but let us try to explain the key points from an Elliott perspective suggesting that “this corrective move in EURUSD” may be done (we never ever know without hindsight, but technically there is lots of evidence here to make the case).
1) Clearly a wave three correction (at least) has been playing since the low in June, labeled as A-B-C, 2) In a standard Zig-Zag correction, Wave B is most often 50% of wave A (that is precisely the length of wave B), 3) Wave C is most often 100% of Wave A (that projection target would have carried Wave C to 1.4046; the actual high in EURUSD was 1.4157 before it staged a big reversal on Friday); so this criteria has been met, 4) Fibonacci retracement levels from the high in December 2009 and the high in July in 2008 are 1.3894 and 1.3958, respectively. 5) MACD oscillator has turned negative (see the bottom of chart circled) and is turning down from an overbought level.
Gold Weekly: A very nice tidy Elliott count fit here…probably too tidy. But, as with the Aussie chart above, we may have divergence into the high. Projection from triangle (roughly) to $1,400. Extended big move from wave 1 carries to 1386.7 projection level.
Traders (brave souls) may want to consider DZZ – PowerShares double-short gold ETF. There seems to be plenty of liquidity based on daily volume (red lines). You will know quickly where you are wrong on this trade, i.e. risk/reward looks pretty favorable, he says (without the gift of hindsight and no clear trend-break yet).
PowerShares DB Gold Double Short ETN (DZZ) Weekly: