EURUSD and USDJPY Elliott Wave Review After the Gap

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Markets gaped against the USD on Sunday, away from Friday’s close price. We can see higher prices on EURUSD, US bonds and also US stocks futures after Larry Summers withdrew from the contest to succeed Ben Bernanke as the next chairman of the Federal Reserve. We have also seen a gap down on Crude Oil Futures after the U.S. and Russia have agreed on a framework for Syria to destroy its chemical weapons stockpile by the middle of 2014, according to media reports on Saturday.

Below we can see a gap up on EURUSD, where we expected a move higher into wave C after a recent correction in wave B. Keep in mind that gaps usually get filled and that we also only have a three wave rise from the monthly lows, so a bearish reversal could follow this week. Technical resistance comes in at 1.3380-1.3400.

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While EURUSD and US Bonds gaped higher the USDJPY moved to the downside and finally reached levels around 98.50 that we highlighted several times last week. However we need a five wave move in wave (c) for a valid and completed expanded flat correction. As such, we are not tracking an ending diagonal in wave (c) that may complete the pattern around 98.00 area with a sub.-wave v). We also see a 61.8% in that zone which could be very interesting for buyers.

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About Author

Grega Horvat Grega is based in Slovenia and has been involved in markets since 2003. He is the owner of Ew-Forecast, but before that he was working for Capital Forex Group and TheLFB.com. His feature articles have been published on FXstreet.com, Thestreet.com, Action forex, Forex TV, Istockanalyst, ForexFactory, Fxtraders.eu, Insidefutures.com, etc. He recently won the award on FXStreet.com for Best Forex Analysis in 2016. At Ew-forecast he helps clients and educates them about the Elliott wave principle and how to label and track unfolding patterns in real time. His approach to the markets is mainly technical. He uses a lot of different methods when analyzing the markets such as candlestick patterns, MA, technical indicators etc. His specialty, however, is Elliott Wave Theory which could be very helpful especially if you know how to use it in combination with other tools/indicators. EW-Forecast To be involved in the market effectively, you need the right guidance and resources, and our team can help you to achieve that. Our team is providing advanced informations about Elliott Wave theory in real time. The Elliott Wave Principle gives you a method for identifying the behavior of the markets and at what points the market is most likely to turn. We help new traders who are interested in Elliott Wave theory to understand it correctly. We are doing our best to explain our views as simple as possible with educational goal, because knowledge itself is power!

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