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DJIA and Gold Prices May Correct Lower

DJIA and Gold Prices May Correct Lower

Jeremy Wagner, CEWA-M, Head of Education


This is a recording of a US Opening Bell webinar from June 26, 2017.

In today’s US Opening Bell webinar, we discussed technical Elliott Wave patterns on key markets for this week. Some key markets we analyzed include Dow Jones Industrial Average and how the pattern appears to be near a potential pivot point. This pattern favors a turn lower from nearby levels for a dip back towards 20,200.

Dow Jones Industrial Average trades below its all-time high from last Monday. We have been anticipating a shorter term reversal and thought we received it last week as the average struggled to hold the gap higher. However, prices have not followed through to the downside. A break to new all-time highs would cause us to reconsider the pattern. Otherwise, we remained focused on a correction to 20,400 or lower.

Though gold prices dipped today, we think the pattern is incomplete to the upside over the coming weeks. If gold prices continue to correct, some wave relationships appear near $1228 and down towards $1185. These areas could be price zones to contain a correction. The patterns do appear to show that prices eventually find support above $1122, which may begin a new wave to above $1295.

Do you want to learn more about Elliott Wave? Grab the beginner and advanced guides here to keep on hand as a resource then join my distribution list here to keep up to date on the Elliott Wave patterns I am following.

USD/CAD is a market where we favor a resumption of a longer term downtrend. The Elliott Wave model suggests the sell off may see another dip before reacting higher. We believe an upward move in price is an upward correction. If it does take place, there are several wave relationships and technical levels coming into play near 1.34-1.35. At that point, we will consider a short entry in the direction of the larger trend. This also suggests crude oil prices may be supported. $39.23 is the key level we are watching for the ‘x’ wave triangle pattern.

EUR/USD continues to trade sideways in a consolidative fashion. We favor buying dips into the 1.10-1.11 price zone. The bullish bias is valid so long as we remain above 1.0906.

GBP/USD has stabilized and the pattern appears bearish as we could be on the forefront of a third wave sell off. We previously wrote about GBP/USD carving a 2017 top and so far, that bearish wave picture has not been negated. However, if GBP/USD does move higher above 1.3060, it may find some resistance near 1.32 or 1.34.

USD/JPY is progressing higher in impulsive fashion and correcting lower in three waves. This is indicative of a bullish trend that is winding up for higher levels. Though prices may dip this week to 109.93, a correction of that depth would be considered typical within an uptrend.

IG Client sentiment among EUR/USD traders continues to print near extreme levels at -2.5 and has been negative since mid-April. This suggests some continued strength in the pair may continue. Learn how to trade using sentiment data at the link above.

---Written by Jeremy Wagner, Head Trading Instructor, DailyFX EDU

Discuss these markets with Jeremy in Monday’s US Opening Bell webinar.

Follow me on Twitter at @JWagnerFXTrader .

See Jeremy’s recent articles at his Bio Page.

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.