Crude Oil Prices Eye $71 and EURUSD Bears are Biting Their Nails
The video above is a recording of a US Opening Bell webinar from April 16, 2018.
Elliott Wave Analysis for Crude Oil
The recent break to new highs for crude oil prices places our focus on a developing ‘Y’ wave of a W-X-Y formation. The dip in crude oil prices in early February 2018 carves what we believe to be the ‘b’ of ‘Y’ wave. Now, we are progressing through wave ‘c’ of ‘Y’. Due to the choppy nature of this wave, we may be witnessing an ending diagonal for the ‘c’ wave.
There are 2 different wave relationships at different degrees of trend pointing to $71 mark as an interesting price level on the chart. Wave ‘Y’ is equal in length to the ‘W’ wave at $71.18. Within the ‘Y’ wave, the ‘c’ leg is .618 times the length of ‘a’ at 71.21.
Therefore, we are anticipating slightly higher crude oil prices towards $71 so long as crude oil holds above the orange trend line near $63.
Elliott Wave Analysis for EURUSD
Last week, we argued that EURUSD was attracted towards 1.2350 while USDJPY maintains a bullish posture. It turns out that EURUSD had more bullish juice in it than anticipated. It is possible a near term bearish pattern emerges but the bears are getting nervous. Bearish patterns remain while the EURUSD chart remains below 1.2476.
EURUSD Sentiment Analysis
EURUSD sentiment dropped a little from last week’s level and the current live reading near -1.5. If EURUSD does work down towards 1.2153 we would like to see continued evidence of sentiment shifting up higher than -1.5 and that would be a bearish signal.
Due to the range bound nature of the EURUSD price chart, it may be best to wait for a break down below support levels prior to entering any longer term bearish trends.
USDJPY Elliott Wave Chart
USDJPY has started a new trend on March 25 with an impulse wave. According to Elliott Wave Theory, we are anticipating another wave of similar size and possibly of Fibonacci proportions. The preferred wave count is that USDJPY prices are zooming higher in a third of third wave. So long as the USDJPY chart is hold above 106.65, then we ought to respect the potential for a move higher in a third wave. A break down below 106.65 will open the door to additional losses down to 106.10-20.
Elliott Wave Theory FAQs
What are Elliott Wave impulse waves?
According to Elliott Wave Theory, the market moves five waves in the direction of the near term trend followed by a three wave counter trend wave. An impulse wave is one of two types of motive waves that denotes trend direction. Therefore, if we see a bearish impulse waveform, then after a three-wave counter trend wave, we can anticipate at least one more bearish motive wave.
For those Elliott Wave technicians looking for further study, read about our expert tips in our beginners and advanced trading guides.
After reviewing the guides above, be sure to follow future Elliott Wave articles to see Elliott Wave Theory in action.
What is the biggest mistake forex trader make?
Regardless of the style of analysis, many traders do lose money because they do not take the time to study the market and the effect of leverage. At DailyFX, we have studied millions of live trades and boiled our study down into a Traits of Successful Traders guide. You will find how leverage and human nature affects our trading so you can be better prepared for the next correction.
Elliott Wave Theory can be applied to a variety of highly liquid markets. FX is one of my favorite markets to apply the Elliott Wave principle. Learn more about trading FX with this guide specifically designed for you.
---Written by Jeremy Wagner, CEWA-M
Jeremy Wagner is a Certified Elliott Wave Analyst with a Master’s designation. Jeremy provides Elliott Wave analysis on key markets as well as Elliott Wave educational resources. Read more of Jeremy’s Elliott Wave reports via his bio page.
Communicate with Jeremy and have your shout below by posting in the comments area. Feel free to include your Elliott Wave count as well.
Discuss these markets with Jeremy in Monday’s US Opening Bell webinar.
Follow me on Twitter at @JWagnerFXTrader .
To receive additional articles from Jeremy via email, join Jeremy’s distribution list.