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Currency Pair Overview:
Majors Moving Slowly At Start
Overall, there were a few pairs that opened the week showing some weakness, namely the pound, and aussie which declined 45 and 30 pips, while the yen showed some strength of 45 pips during the new trading week. The Australian manufacturing index has expanded during September by coming in at 51.7, where 50 is the dividing line between contraction and expansion. Also released was a low level report on inflation on the continent which has shown to have stalled during October for a fourth month.
The euro (Eur/Usd 1.4731) was rejected in Friday trade from the 20 day moving average at 1.4845. The pair fell quickly, finally becoming exhausted near the 1.4710 level which is close to where the pair bottomed several days earlier. The pair has more support near the 1.4640 area where the 50 day moving average is located at.
The pound (Gbp/Usd 1.6434) had a wide 45 pip gap at the start of trading this week. The pair opened 45 pips lower denoting that dollar strength was seen over the weekend. The pair is currently being supported by the 100 day moving average at 1. 6362 and just below that is the 50 day moving average which is converging with the 20 day moving average near 1.6240.
Trade Plan of the Day: TheLFB Trade Plan is Eur/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 aussie (Aud/Usd 0.8990) opened nearly 30 pips lower during the Asian session. The pair quickly closed the gap as trading remained concentrated around the opening price. The aussie has been tangling with the 20 day moving average over the past few days. Currently, the pair is finding support near the 0.8950 level which is where the pair paused on Thursday of last week.
The cad (Usd/Cad 1.0828) has been rejected from the R1 swing level at 1.0886 during the session. The pair had a minor gap which was closed immediately as the pair broke above the high of the day from Friday at 1.0837. The pair will have the 50 day moving average at 1.0705 to act as support and below that is the 20 day moving average.
The swissy (Usd/Chf 1.0246) has attempted to break above the high from last week at 1.0285. The pair then fell to test support at the neutral swing point near the 1.0230 area. The pair has been trading near the 20 day moving average and has had a hard time breaking free with resistance at 1.0290 while support is seen near the 1.0150 level.
The yen (Usd/Jpy 89.94) opened the new trading week approximately 45 pips stronger and is struggling to close that gap. The pair was supported near the S1 swing level at 89.40. The yen has two immediate levels of resistance at 90.38 and at 91.10 which correspond with the 20 and 50 day moving averages respectively.
TheLFB Charting: Gold Elliott Wave view
4 Hour chart trend: Mixed. Main price points: 1015-1020, and 1070. Looking for: Wave 4)
Gold has made a turning point over the past few sessions, around the 1025 level, where wave C of wave 4) may already be completed. Traders however, need to be very patient since prices are still trapped in a corrective channel.
Any break of the upper parallel line will suggests that wave 5) is here.
TheLFB Charting: S&P Futures Elliott Wave view
4 Hour chart trend: Mixed. Main price points: 1036.50, and 1069. Looking for: 1069 to hold
S&P futures are trading higher after good GDP numbers from the U.S. Technically the market may still be going lower so long as prices stay below the 1069 resistance area and black wave I) low.
If the wave count is correct then prices could fall down into the wave v) over the coming sessions.
Any move through the 1069 zone will invalidate the wave count.
TheLFB Charting: Eur/Usd Elliott Wave view
4 Hour chart trend: Mixed. Main price points: 1.4682, and 1.5062. Looking for: Wave II
Eur/Usd found the support in wave I, as covered yesterday, when the U.S. GDP report numbers pushed the dollar lower across the board. As such, Eur/Usd is trading higher, probably in a corrective wave II. The most common structure of the corrective waves is a zig-zag pattern, so the market may come out with another push into 61.8% retracement of wave I distance, before wave II may be done.
Wave count valid below 1.5062 top.