Gold & Silver Searching for Bottom as USD/JPY Outlook is Bullish
The video above is a recording of a US Opening Bell webinar from April 8, 2019. We focused on the Elliott Wave patterns for key markets such as gold, silver, crude oil, USDJPY, EURUSD, NZDUSD, and USDCAD.
Gold prices rally but lower levels still in sight
In last week’s webinar, we highlighted how gold prices fall towards target. To start this week, gold prices have rallied, but we are viewing this as a temporary bounce.
It is anticipated that gold would hold below Monday’s high of $1325 with some targets and wave relationships appearing below $1250. What this means is that if gold prices continue to fall below $1250, we will look for signs of a longer-term bottom forming.
Though not expected, if gold prices do run higher above $1325 before dropping below $1250, then we will need to reassess the forecast and reconsider if the multi-year Elliott wave triangle has finished and found a low.
Therefore, we are showing the current Elliott wave for gold to be wave 2 of ‘c’ of wave E (zigzag) of a triangle. We are counting the triangle as a larger wave (X) which began in July 2016.
Silver prices came close to downside target
We have been highlighting since early March about how silver prices may fall towards 14.75. We refined this target later to be 14.40-14.80. Last week, silver prices hit 14.90.
This is close and a rally above 15.64 would build the case the low is in for silver. However, experience dictates that more times than not, a wave that is close to target oftentimes comes back to slice through the target later.
Therefore, the silver price forecast is similar to gold in that we are looking for continued weakness to be temporary into the 14.40-14.80 price zone. We believe silver is in the ‘c’ wave of a zigzag pattern. Once this ‘c’ wave exhausts, we will anticipate a large rally to $17 and possibly $19 that may take many months to complete.
USDJPY bullish picture sustained
The multi-year bullish forecast yielded on January 3 remains in place despite the recent correction for USDJPY. The March 25 dip to 109.70 did meet some wave relationships. It is possible that after a brief rally to near 112, USDJPY may turn lower to retest 109.70 as the depth of the March 5 correction is a little short.
We are uncertain of the odds of a retest, but do believe that after the correction is over, a large rally may ensue as USDJPY wave be in a third wave of an impulsive wave sequence. Third waves tend to be the longest and strongest of the Elliott wave sequence. If correct, then wave 3 would break to new highs above 112 that may work up towards 117-122.
Elliott Wave Theory FAQ
How does Elliott Wave theory work?
Elliott Wave theory is a trading study that identifies the highs and lows of price movements on charts via wave patterns. Traders analyze the waves for 5-wave moves and 3-wave corrections to determine where the market is at within the larger pattern. Additionally, the theory maintains three rules and several guidelines on the depth of the waves related to one another. Therefore, it is common to use Fibonacci with Elliott Wave analysis. We cover these topics in our beginners and advanced Elliott Wave trading guides.
After reviewing the guides above, be sure to follow future Elliott Wave articles to see Elliott Wave Theory in action.
Not sure if Elliott wave is right for you? Believe it or not, when I first started trading I couldn’t understand why technical analysis worked. Now, I’m 100% technical through Elliott wave. Learn more about how Jeremy got started into Elliott wave from his podcast interview on Trading Global Markets Decoded with Tyler Yell.
---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.
Join Jeremy in his live US Opening Bell webinar where these markets and more are discussed through Elliott wave theory.
Follow Jeremy on Twitter at @JWagnerFXTrader .
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