EU and GU Down - Daily Wave Analysis for October 9, 2013 2013.10.10

October 10, 2013 11:08

Hello Forex traders, sorry for the late post. My electricity (and the rest of the apartment building) was disconnected by vandals of all things that can happen....

EURUSD

The EURUSD did eventually respect the 61.8% Fibonacci retracement level as indicated yesterday and price has broken through the uptrend channel. This could be either a wave 2 or wave B. For the moment I am treating it as an ABC (orange letters) but the count can change into 1-2-3-4-5 depending on how price unfolds. The target of the ABC zigzag is usually a 1:1 of wave a, which means wave c could end around 1.3482. If price extends further, then the chances of this being a wave 3 increase.

4 hour EURUSD:

The EURUSD made corrective ABC patterns after a 5 wave down and is now continuing with the bearish momentum. Expecting the wave 3 to continue for a bit and then a wave 4 and 5. Depending on how deep the move goes, we might expect another wave 4 and 5 (see above).

30 min EURUSD:

GBPUSD

The Cable is continuing his downwards path after indeed struggling at the 38.2% and 50% Fibonacci retracement levels (wave 4 versus wave 3). The wave 5 target is usually around the 61.8% or 100% of wave 1 and 3. There is also a 38.2% Fib retracement of the entire move up (green outlined box). Therefore 1.5950 could be a level where price bounces.

4 hour chart GBPUSD:

When looking at lower time frames, we can see that the downside pressure is quite strong and price has accelerated further down. The bounce off of the 382 Fib could be shallow and a continuation to lower levels for a wave 4-5 seems likely now. After that happens, there could double divergence on lower time frames and 3 wave ABC correction up could commence.

30 min chart GBPUSD:

USDJPY

The UJ seems to be making a bounce to the upside, which could be the expected finish of the daily triangle (wave E of wave 4). The break of the high t 97.50 would increase the odds of such a scenario, although there is more resistance to fight through (down trend line).

4 hour chart USDJPY:

30 min chart USDJPY:

The lower time frames are showing either an ABC correction or potential 1-2-3-4-5 setup. It is still too early to tell. For the moment I choose the latter but this count can change depending on how far price moves up.