S&P 500 Technical Analysis: New Highs While US Dollar Bear Patterns Appearing
The video above is a recording of a US Opening Bell webinar from November 4, 2019. We focused on the Elliott wave patterns for key markets such as S&P 500, USD/JPY, NZD/USD, EUR/USD, GBP/USD, and USD/CAD.
S&P 500 Technical Analysis Breaks Higher out of Elliott Wave Triangle
S&P 500 has continued to hit new all-time highs. The consolidation from April 2019 to October 2019 is being labeled an Elliott Wave triangle. Once a triangle forms, the break from the triangle is considered to be a terminal wave. Therefore, the current rise to new all-time highs is likely the finishing wave of the trend that began December 2018.
Some wave relationships appear near 3250 and 3500. SP500 does not have to jump that high. If S&P500 does make it to these levels, we’ll look for reversal symptoms to assess the probability of a turn.
Bottom line, after a run higher, this wave terminates and a retest to the December 2018 lows is high probable. A move below 2854 is enough evidence to suggest the top is in, though warning signs appear near 2900.
USD/JPY Technical Analysis: Bullish Trend May Have Topped Last Week
We mentioned in last week’s webinar how the uptrend is mature and nearing an end. The spike high last Wednesday might have been the final trades of the uptrend. We won’t know for sure until the patterns develop more.
This uptrend is being counted as a corrective partial retracement higher as wave 2 or B. Therefore, the next wave is anticipated to be a down wave in wave 3 or C. A break below Friday’s low of 107.89 while holding below 109.29 adds further weight to the immediate bearish bias. Should the break occur, we are targeting lower levels below 104.
Therefore, the current Elliott wave for USDJPY appears to be wave 3 or C lower. If 109.29 is broken, then we are still in a bullish wave 2 or B.
NZD/USDTechnical Analysis: Bulls May Take Control up to 6700
The price action NZD/USD has been a little elusive. The depth of the September 2019 low sure smells like a large ‘B’ wave. We can consider this proposed ‘B’ wave as a double zigzag pattern. It is possible this proposed ‘B’ wave is part of an expanded flat or triangle pattern. Either way, the higher probability move we are following is a rally back up towards 6700. From there, the models diverge with the flat pattern looking for more gains while the triangle may pivot near 6700.
Bottom line, the analysis on NZD/USD appears we are in the ‘C’ wave of an expanded flat or Elliott wave triangle.
US Dollar Index Impulse Wave is Mature
US Dollar Index has fallen for most of last week. This impulse wave from the October 1 high is mature and a rally back to 9750-9850 is not out of the question. We are viewing any rally as being temporary and likely to hold below the October 1 high of 99.23. Initial targets remain below 94.60 with even lower levels into the 80’s possible.
Read also: how to trade US Dollar Index
EUR/USD Technical Analysis: Bullish Pattern Incomplete
The resistance trend line break and top side retest of the same line keeps the forecasted rally alive for EURUSD. The dip from October 21 is taking the shape of a temporary correction. The key level we have been watching is 1.1063 and prices have held above this level so far.
The subsequent rally last week might be enough to satisfy wave .v of 3. If so, a dip in purple wave 4 may drive down to 1.1050, though it doesn’t have to.
Bottom line, EUR/USD appears to have some unfinished business to the topside as our target for 1.18 and higher levels remains open.
After reviewing the guides above, be sure to follow future Elliott Wave articles to see Elliott Wave Theory in action.
---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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