Elliott Wave - EUR/USD, GBP/USD

Daily Forex Technicals | Written by The LFB-Forex.com | Aug 07 08 11:50 GMT |


Welcome Traders. On Tuesday we saw Eur/Gbp analysis that mentioned the 0.7915 level as a potential long break-out zone. The main reason for no volume on this pair is linked to the consolidation moves from both the Eur/Usd and Gbp/Usd. We saw a move down on both pairs and with a stronger dollar against both the euro and sterling means that Eur/Gbp has nowhere to move, and will probably be caught in the range. In the Tokyo session we saw a move up to the 0.7930 level and that will probably continue higher throughout the London session, further on to possible targets around 0.7980 if today’s ECB press conference allows for stability in Euro-zone rates, and at worst no increase from the Bank of England. Positions that are still long on this pair from Tuesday should trail the stops higher before the news releases.
Today's Charts

EUR/USD

I have two possible wave counts for this pair. On the picture below there is an A-B-C flat in black wave 4), with an ending diagonal in wave 5) with the “throw-over”. Attention is directed to the levels around 1.5300, which, if unable to hold, looks to lead down to the 1.5000 area. There are resistance levels around 1.5611 where the daily trend-line becomes a significant resistance area for those looking for new lows in the next few weeks. It seems that 1.5611-1.5640 will be very interesting zone for the sellers.



On the chart below there is a wave count, wave 4) in place since March 08, offering a 700 pip range with buyers coming in at support and sellers moving in on the resistance points. We have two flat A-B-C moves with exactly the same numbers of bars that may indicate a near-term bottom may have been seen. Traders going long here should realize that this is a high contra trend trade; the dollar is still bullish. However, if this wave count is correct, then we should see a move limit move from the 1.5300 area back to test topside areas around the 1.6000 again. Time will tell, and that will all be in the hands of the ECB today.


GBP/USD

There has been nothing to take in the pound for nearly two months now, outside of some near-term bouncing around. There is a possible triangle count from the beginning of 2008 that may shake the pound out of its demise. The first zig-zag is in blue wave A) and also the zig-zags are in wave B) and C), from where we should see another move up from current prices in to the wave E). Today’s rates decision will have a high influence on this count.


Above we have a flat pattern which is already complete, and now the markets look to be waiting on a correction move before momentum increases. The confirmation of the wave count will be when the price breaks down through the support area from 1.9350-1.9415, which could lead us to the 1.9000 level. The sellers could be around 1.9648 where they will find resistance in the black wave iv of C), and also the upper trend-line of the last move down.



The LFB-Forex.com