Elliott Wave - EUR/USD, GOLD

The euro traded higher yesterday as oil bounced from the support just below $90 per barrel. We also saw higher prices on Gold reaching a higher resistance area between $890-900. The next strong resistance level is $911, which is the high from the middle of September. Gold is looking very bullish at the moment and it seems that the stronger upside moves could happen any moment. This may be the time for a higher euro today, which could be the case if we consider the possible zigzag correction discussed yesterday.

Today's Charts

Eur/Usd

We have updated two hour euro chart from yesterday. Price targets were higher yesterday as the market found the support area at the 50% Fibonacci projection level.

Firstly, we were targeting the breakout through the upper line of the channel which usually happens in wave a; like in our case. After the wave a was completed, we saw the move down into the Fibonacci retracement levels, with the current 1.3544 low around the 61.8% of wave a. In today’s trading sessions, traders could be trying to push the euro higher if the Fibonacci supports hold. The upside targets are between 1.3800-1.3882, which are in the same zone as the previous wave four. The move of wave c will be confirmed after the breakout through the small upper blue line resistance appears.

Gold

Gold is moving higher and higher as the prices almost reached the high of the last month. As mentioned above, the prices are quite strong on the upside with new impulses on the way, thus creating the potential for new monthly highs pretty quickly. If the prices bounce from the top of the blue wave II then we can expect a small pullback probably a maximum of $25. This could be the retrace of the correction into the black wave ii), with a possible bottom of the Fibonacci 38.2%. Traders that are waiting for the right buy opportunity should wait on this possible pullback or use a larger stop loss than usual.

Written by TheLFB Trade Team, © 2007-2008 LFB Services, LLC. All rights reserved. http://www.TheLFB-Forex.com

TheLFB Risk Disclaimer can be found at http://www.thelfb-forex.com/content.aspx?id=174.

The Copying, Broadcast, Republication or Redistribution of TheLFB Content is Expressly Prohibited Without the Prior Written Consent of LFB Services, LLC.