I don’t trust S&P’s recent uptrend because it has corrective formation of waves, thus S&P will cap around 1350 or even earlier and we will see another low down to 1120 I think. I’m very sorry for USA economy but this decline will re-adjust their finance and will give ground for new economy growth somewhere in 2010.
I expected rise of the USD but NOT THAT FAST. Usually there is situation once in 3-4 month on FX that you can observe very long market moves, but this was extra-long and I was basically paralyzed by its magnitude.
However everything comes to an end at some point - I’ve closed all my sell positions and expect correction of at least 30%.
Currently market is forming “surprise” downside wave on every chart - after this point we will see USD will be going back.
For very long term traders - current decline (if it’s final decline of course) will open new hights around 1.71 for EUR. Generally it was long time expected move from USD and you can plan you future buys on new lows.
EUR/USD finished another wave and labeling becomes more clear.
Current downside can be correction of 1.4309 - 1.6038 and can extend to 1.5520
Another scenario says that current up wave can extend and price will reach 1.6200 levels.
GBP also has unusual wave completion however it’s not guaranteed. GBP is goind down.
Gold has almost finished correction phase, I think it will extent more to 900 level. Will see how it goes from there. Apparently gold will also going down.
In spite of global defeat of the USD all over the place I still can say that USD will lose not any pips during next week. The chart patters for GOLD and USD look VERY strong in favour of dollar rise.
If my assumption is correct some force should stop horde of USD bears and kick them back. I know only one force that can do it - intervention! I think USA will hide themselves behind of the Bank of Japan. I still remember BoJ was doing this on USD/JPY 5-6 years ago.
Here are some charts for analysis:
GBP
GOLD
EUR
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About the strategy:
As usual capital protection is primary objective so maximum draw down set to 10%. I will be trading small but long term positions of GBP EUR CHF vs USD. Leverage is 1:50.
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Index looks heavy and ready for the next downside movement. But I expect price to jump a little into 1400 area but no higher than 1440.
Possible scenarious displayed on the chart.
Tough last weeks for traders. Here is my vision of future develoment.
GBP will continue with upside movements into into 1.9900 area. However it should stop there and continue to decline in order to fullfill last “c” wave of cycle started at 2.1160. Some wave dependencies pictured on the chart.
EUR is going down (at least I think so). It should drop below 1.5280 to finish zigzag correction started at 1.6020. Target zone for the pair - 1.5100. Current price junction is perfect 61% reversal point for downside.
Gold is about to decide where to go for the next month or two. 2 scenarious possible:
It’s very dangereuos to add emotions to trading but when you WIN and see these stops cracking under pressure and your equity jumping into the sky it gives you an orgasm. Which is always good to your health!
PS. It’s too early to say wheather USD is going to decline but first wave already there.
P.S.S: It was a trap - as usual - forex is a dagereuos place.
USD has formed very dangereous pattern on GBP/USD. If it will break the current figure down than much more substantial growth of USD will come in next 1-2 months.
From another point of view as usual public speech of Bernake was used to trap rookie money. As the result - huge amount of sell orders versus main tendency of the market - dollar decline - will be sweet piece of pie for big players.
My personal opinion - it’s a trap, dollar will continue to decline right now.
EUR is going up now, but no one knows for how long. Upside potential above 1.5825 is high but 3 big down wave still missing so new lows can come after short upside.
GBP is going up - retracing full 2.0390 - 1.9370 move. 2.0000 is very likely.
Gold is forming new down wave. After short up correction decline will follow. Based on width of wave 2.
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