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Currency Pair Overview:
Majors Stuck In Ranges During Asian Session
Overall, the major currency pairs traded within tight ranges during the Asian session. The largest move was seen from the cad, which has weakened by six pips. During the session a report from Japan has shown that exports have fallen at a slower pace in September as a result of the global stimulus being offered to consumers.
The euro (EUR/USD 1.5019) is trading within a tight range during the Asian session after having quite a volatile US session. The pair is trading around the 1.5000 level with support seen at the neutral swing point at 1.4980 and 1.4880 levels while resistance is clearly seen at the 1.5050 area.
The pound (GBP/USD 1.6626) is trading near the highs achieved during the previous session after the pair ran nearly 280 pips after bouncing off the 100 day moving average. The pair has a natural level of support at the neutral swing point at 1.6520 while resistance remains in the 1.6640 area.
The aussie (AUD/USD 0.9279) is testing support at the neutral swing point early in the Asian session. The high of the previous session is located near the R1 swing level at 0.9330 which will provide resistance for the pair. The Aussie will see support in the 0.9180 area as well as the 0.9115 level.
The cad (USD/CAD 1.0433) is trading below the neutral swing point at 1.0472 during the new trading session. The pair was rejected from the 20 day moving average during the previous session at 1.0575 and will likely encounter more resistance at that level as that is where the R1 swing level is also located.
Trade Plan of the Day: TheLFB Trade Plan is AUD/USD, one of the six that are available to members on the major pairs each day, plus four Jpy based cross pairs, plus S&P futures, oil, gold, and the dollar index.
The swissy (USD/CHF 1.0056) has been trading in a tight range after the US session close. The pair will have a tough time breaking above the neutral swing point at 1.0085 during the new session as it was also previous support. The pair has a minor support level at 1.0030 and should that level go the pair will likely see parity with the dollar during the session.
The yen (USD/JPY 91.04) has been using the neutral swing point at 90.85 as support in the new session. The pair has many levels of support at 90.50 in the 89.90 while resistance is seen at the 91.30 area.
TheLFB Charting: Gold Elliott Wave view
4 Hour chart trend: Long. Main price points: 1043, and 1070. Looking for: Wave 4)
Gold traded higher recently after a bounce from the 1043 support region at the start of the week.
This area needs to be taken out as support for a wave 4) pull-back confirmation. Until that happens, traders must be careful with any short positions, as the market may easily hit new highs in the red wave 3) before wave 4) falls lower.
The primary wave count is wave 4) already in progress, and this recent move higher could be a blue wave B pull-back, before the expected move lower in wave C over the coming days.
This count remains valid so long as the market trades below the 1070 top.TheLFB Charting: S&P Futures Elliott Wave view
4 Hour chart trend: Long. Main price points: 1075.75, and 1115-1120. Looking for: Wave 5) top
S&P futures made new highs in trade this week, and as such, the wave count has been re-worked and a new target at the 1115-1120 area is being monitored.
An expanding diagonal pattern in black wave 5 or C is not completed yet, as the market seems to be forming a complex (W)-(X)-(Y) structure with the current wave B of wave (Y) in process.
The wave count remains valid so long as the current wave B trades above the 1075.75 wave (X) bottom. Any break of this bottom will signal for a move lower over the coming sessions.
TheLFB Charting: EUR/USD Elliott Wave view
4 Hour chart trend: Long. Main price points: 1.4816, and 1.4993. Looking for: Wave 5)
EUR/USD traded lower in the previous session, after earlier setting a 1.4993 top, which was just 7 points below our 1.5000 target of wave III. The wave count remains in place with wave IV in progress, and it prices trade below 1.4816, into the wave I area, the wave count will become invalid.
Once the current wave IV is finished, and a move to take out the 1.4993 top, traders will look for another push higher, towards the first target at the 1.5050 area followed by a second, shown at the 1.5150 resistance zone.
In this case five red sub-waves of blue wave 5) will be done, so a turning point will be once again expected.