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EURUSD opened the week with positive momentum marginally below the 1.0600 level, having slightly trimmed some of its recent gains as overbought signals appeared on the chart.

The RSI keeps fluctuating comfortably above its 50 neutral mark following the pullback below 70, reflecting persisting buying interest, whereas the stochastics and the MACD are looking for a downside reversal, suggesting that some caution is still required.

Yet, with the pair maintaining a clear bullish structure in the short-term picture, which recently expanded above the long-term crucial descending trendline drawn from May 2021, traders may continue the push to higher ground.

The pair is currently building a base around the 1.0580 level, where the 50-period exponential moving average (EMA) is supporting the market in the four-hour chart. A jump into the 1.0700 territory would bring May’s resistance of 1.0786 back on the radar. Running higher, the way would clear for the 50% Fibonacci retracement of the 2021-2022 downtrend at 1.0945. Another victory at this point could see a continuation towards the 1.1120–1.1190 constraining zone.

On the downside, if the 1.0580 floor cracks, the broken descending trendline may defend the bulls with the help of the 20-day EMA around 1.0500. Should the bears win the battle here, the 200-day EMA and the surface of the broken bullish channel could next come to the rescue within the 1.0400–1.0367 area. Note that the 50-day EMA is converging in that territory too. Hence, a decisive close lower could confirm another leg down to the 23.6% Fibonacci of 1.0194. If the latter proves fragile, the bearish phase could last till the channel’s lower boundary seen at 1.0010.

In brief, EURUSD has the foundation to move further north despite some weakness in sentiment. For that to happen, the 1.0580 base will need to stand firm.

Hello fellow traders. In this technical blog we’re going to take a quick look at the Elliott Wave charts of NASDAQ . As our members know, the Index shows bearish sequences in the cycle from the November 22. 2021 peak. Incomplete structure calls for a further decline. Recently Nasdaq has made 3 waves bounce , when it has reached our selling zone. We recommended members to avoid buying and keep selling rallies in 3,7,11 swings due to bearish sequences. In the further text we are going to explain the Elliott Wave Forecast and the trading strategy.

Nasdaq H4 Elliott Wave Analysis 11.10.2022

Nasdaq is giving us bounce that is correcting the cycle from the 13743.04 peak. At this moment we believe recovery is still in progress as the price shows incomplete sequences. Consequently we are calling for more short term strength toward 11870.18-12632.68 area to complete (B) blue . We recommended members to avoid buying the Index in proposed push up. Strategy is waiting for Blue Box to be reached before selling it. As the main trend is bearish we expect sellers to appear at the blue box for 3 waves pull back at least. Once pull back reaches 50 Fibs against the B red low, we will make short position risk free ( put SL at BE) and take partial profits. Invalidation for the trade would be break above 1.618 fibs extension: 12632.68

As our members know Blue Boxes are no enemy areas , giving us 85% chance to get a reaction.

Reminder:

Our charts are easy to trade and understand. When you see combination of right side stamp and blue box on the chart, the instrument can be traded. Quick explanation :

-Red bearish stamp+ blue box = Potential Selling Setup
-Green bullish stamp+ blue box = Potential Buying Setup
-Charts with Black stamps are not tradable. 🚫

Nasdaq H4 Elliott Wave Analysis 11.24.2022

Nasdaq reached equal legs ( blue box ) area at 11870.18-12632.68 and made turn lower from there. We already got a reaction from the blue box. However we still believe another marginal push up within the blue box would be ideal to complete recovery.

Nasdaq H4 Elliott Wave Analysis 11.24.2022

Eventually the index has made last push up and found sellers as expected. We have got decent reaction from the blue box that has reached and exceeded 50 fibs against the connector. As a result , members who took short trades made positions risk free ( Put SL at BE) and took partial profits. At this stage we call wave (2) blue connector completed at 12332 .6high. We would like to see break of 10/13 low to confirm next leg down is in progress.

Japan's inflation rate is finally starting to tick up. It's expected that the country will report a further increase in inflation in November to 3.9% from 3.7% prior. But, before that information is made available, the BOJ is expected to meet to decide its monetary policy stance.

Normally this would be an issue for a central bank, having to make a rate decision without the latest inflation figures. But the long-standing consensus is that the BOJ won't change policy, at all, and keep its now decades-long extreme easing policy. So, if the interest rate isn't going to be a surprise, what could move the markets? Well, that's preparing for what's coming next year.

A change in leadership

Kuroda, known as an ultradove, will step down at the end of his term in April. The consensus is that since rates have been negative for the entirety of his mandate, it's unlikely he will change the situation just as he's about to go out the door. But, that doesn't mean he won't help set things up for whomever replaces him. And that could start coming out as soon as the next meeting.

For a long time, it's been rumored that the most likely replacement for Kuroda would be Hiroshi Nakaso. He's a former Finance Ministry official, and is seen as a lot more hawkish than the current governor. In the past, he's already issued proposals on how the BOJ could exit its extraordinary easing policy.

A change in outlook

Nakaso has proposed a slow shift in policy, with small steps to bring inflation down. That could be something of a challenge, since many other central banks have raised dramatically to head off skyrocketing inflation. Japan has managed to avoid that situation, so far, but inflation is near double the target rate and keeps rising. Which has been increasing pressure on the BOJ to do something.

One of the ways that the BOJ could relieve that pressure is to let it be known that it is considering some of the "soft" measures to lift rates, but not actually do any changes. Given how long the BOJ has been stuck in one policy, it could be enough to "re-anchor" inflation expectations.

What about the weaker yen?

One of the things that was driving inflation was the weakening yen earlier in the year. It got so bad that the Japanese government had to step in a couple of times. But since expectations that the Fed was about to level off in its rates started to cement in the mind of the markets, the yen has recovered a little. This has given the BOJ - and particularly Kuroda - more room to keep rates low at least for a while.

But, if the trend with the currency could reverse, that could cause complications for the BOJ. One of the ways to deal with that would be to suggest the BOJ was looking at easing off on yield curve control. That's a policy that would be expected to be enacted if Nakaso were to become governor. But, whether the BOJ judges it an opportune moment to let that slip now or safe that card to play in the new year, is still an open question. That could be the determinant of whether the yen continues to drift in it's current direction, or starts to recover against the dollar on expectation of the new policy.

The Dax 40 slumps over risk-off sentiment into the holiday season. The rally came to a halt near last June’s high of 14700. Then a break under the lower end (14150) of the previous consolidation forced leveraged positions to close out, sparking volatility in the process. The psychological level of 14000 has failed to contain the sell-off and turned into a fresh resistance. 13600 is the next support. As the RSI sunk into oversold territory, those looking to buy the dip may want to wait for the liquidation to settle down. 

Silver falls back as the dollar extends sharp gains across the board. A bearish RSI divergence showed a slowdown in the rally. After a double top at the psychological level of 24.00, the first wave of profit-taking took the price below 23.20, putting the bulls on the defensive. The next round number 22.00 coincides with the base of a previous breakout and the 30-day moving average, making it an area of particular interest. Its breach could trigger a deeper correction to 21.00. 23.50 has become a fresh hurdle.

The pound tumbled after the BoE expressed concerns of a prolonged recession. On the daily chart, the near 3-month long consolidation might have come to an end after a bullish candle above 0.8650. The surge is likely to be caused by short-covering from traders on the wrong side. The price has hit resistance at 0.8770 which lies in the supply zone extending to last month’s peak at 0.8830. A bullish breakout would resume the rally in the medium-term. In the meantime, 0.8620 is a key support to keep the bounce intact.

USD/JPY:

The current general bias for USDJPY on the H4 chart is bullish. To add confluence to this, the price is above the Ichimoku cloud which indicates a bullish market. If the bullish momentum continues, expect USDJPY to break the 1st resistance line at 137.657, where the 61.8% Fibonacci line and previous low are located before heading towards the 2nd resistance at 140.356, where the 50% Fibonacci line and previous swing low are. In an alternative scenario, price could head back down towards the 1st support at 133.007 where the 88% Fibonacci line is.

Areas of consideration:

• H4 time frame, 1st resistance at 137.657
• H4 time frame, 2nd resistance at 140.356
• H4 time frame, 1st support at 133.007

DXY:

On the H4 chart, the overall bias for DXY is bearish. To add confluence to this, the price is below the Ichimoku cloud which indicates a bearish market. If this bearish momentum continues, expect the price to possibly break the 1st support line at 103.418, where the -27.2% Fibonacci expansion line is before heading towards the 2nd support at 102.352, where the -61.8% Fibonacci expansion line is. In an alternative scenario, price could head back up and retest the 1st resistance line resistance at 104.648, where the previous swing low is.

Areas of consideration:

• H4 time frame, 1st resistance at 104.648
• H4 time frame, 1st support at 103.418
• H4 time frame, 2nd support at 102.352

EUR/USD:

Looking at the H4 chart, my overall bias for EURUSD is bullish due to the current price being above the Ichimoku cloud, indicating a bullish market. To add confluence to this bias, price has also broken above the ascending bullish channel. If this bullish momentum continues, expect the price to possibly head towards the 1st resistance at 1.07652, where the previous swing high is. In an alternate scenario, price could possibly head back down to break the 1st support level at 1.06014, where the previous swing high and 78.6% Fibonacci line are located before heading towards the 2nd support at 1.04484, where the 38.2% Fibonacci line is.

Areas of consideration :

• H4 1st resistance at 1.07652
• H4 1st support at 1.06014
• H4 2nd support at 1.04484

GBP/USD:

Looking at the H4 chart, my overall bias for GBPUSD is bullish due to the current price crossing above the Ichimoku cloud, indicating a bullish market. Expecting price to head back up to possibly continue heading towards the 1st resistance at 1.22770, where the previous swing high is. In an alternative scenario, price could possibly head back down to retest the 1st support at 1.19008, where the 78.6% Fibonacci line is.

Areas of consideration:

• H4 1st resistance at 1.22770
• H4 1st support at 1.19008

USD/CHF:

The overall bias for USDCHF on the H4 chart is bearish. In addition, the price is below the Ichimoku cloud, indicating a bearish market. If the current bearish trend continues, expect the price to head back down towards the 1st support line at 0.91932, where the previous swing low and 12.72% Fibonacci extension line is . In an alternative scenario, price could possibly head up towards the 1st resistance at 0.93706, where the previous swing low is .

Areas of consideration

• H4 1st support at 0.91932
• H4 1st resistance at 0.93706

XAU/USD (GOLD):

Looking at the H4 chart, my overall bias for XAUUSD is bullish due to the current price being above the Ichimoku cloud, indicating a bullish market. If this bullish momentum continues, expect the price to continue heading towards the 1st resistance at 1824.515 where the recent high is. In an alternative scenario, price could possibly head back down to retest the 1st support at 1786.545, where the previous high is.

Areas of consideration:

• H4 time frame, 1st resistance at 1824.515
• H4 time frame, 1st support at 1786.545

AUD/USD:

Looking at the H4 chart, my overall bias for AUDUSD is bearish due to the current price being below the Ichimoku cloud, indicating a bearish market. If this bearish momentum continues, expect the price to continue heading towards the 1st support at 0.65849, where the 78.6% Fibonacci line is. In an alternative scenario, price could possibly head back up towards the 1st resistance at 0.67711, where the 61.8% Fibonacci line is

Areas of consideration

• H4, 1st resistance at 0.67711
• H4, 1st support at 0.65849

NZD/USD:

Looking at the H4 chart, my overall bias for NZDUSD is bullish due to the current price being above the Ichimoku cloud, indicating a bullish market.

To add confluence to this bias, price has broken out of the ascending channel. If this bullish momentum continues, expect the price to possibly break the 1st resistance line at 0.64685, where the previous swing high is before heading towards the 2nd resistance at 0.65758, where the previous swing high is. Alternatively, the price may head back down breaking the 1st support at 0.63525, where the 88% Fibonacci line is before heading towards the 2nd support line at 0.62092, where the 78.6% Fibonacci line is.

Areas of consideration:

• H4 time frame, 1st resistance at 0.64685
• H4 time frame, 2nd resistance at 0.65758
• H4 time frame, 1st support at 0.63525
• H4 time frame, 2nd support at 0.62092

USD/CAD:

On the H4 chart, the overall bias for USDCAD is bullish. To add confluence to this, the price is crossing above the Ichimoku cloud which indicates a bullish market. If this bullish momentum continues, expect the price to head towards 1st resistance line at 1.38082, where the 78.6% Fibonacci line is. In an alternative scenario, price could head back down to retest the 1st support at 1.35029, where the 38.2% Fibonacci line is.

Areas of consideration:

• H4 time frame, 1st resistance at 1.38082
• H4 time frame, 2nd resistance at 1.39775
• H4 time frame, 1st support at 1.35029

OIL: 

Looking at the H4 chart, my overall bias for BCOUSD is bearish due to the current price crossing below the Ichimoku cloud, indicating a bearish market. If this bearish momentum continues, expect the price to possibly head towards the 1st support line at 76.859, where the -27.2% Fibonacci expansion line is located. In an alternate scenario, price could possibly break the 1st resistance at 81.996, where the previous low is located., before heading towards the 2nd resistance at 90.619, where the 50% Fibonacci line is.

Areas of consideration:

• H4 time frame, 1st resistance at 81.996
• H4 time frame, 2nd resistance at 90.619
• H4 time frame, 1st support at 76.859

Dow Jones Industrial Average:

On the H4 chart, the overall bias for DJI is bearish . To add confluence to this, the price is crossing below the Ichimoku cloud which indicates a bearish market. If this bearish momentum continues, expect the price to head back down towards the 1st support at 32490.37, where the 61.8% Fibonacci line is. In an alternative scenario, price could possibly break the 1st resistance line at 34106.01, where the previous swing high is before heading towards the 2nd resistance line at 35492.22, where the previous swing high is.

Areas of consideration:

• H4 time frame, 1st support at 32490.37
• H4 time frame, 1st Resistance at 34106.01
• H4 time frame, 2nd Resistance at 35492.22

DAX:

Looking at the H4 chart, my overall bias for DAX is bearish due to the current price being below the Ichimoku cloud, indicating a bearish market. If this bearish momentum continues, expect price to break the 1st support at 13941 where the previous swing high is before heading towards the 2nd support at 13057, where the 61.8% Fibonacci line is. In an alternative scenario, price could possibly head back up to retest the 1st resistance at 14709, where the previous swing high is.

Areas of consideration:

• H4 time frame, 1st resistance is at 14709
• H4 time frame, 1st support is at 13941
• H4 time frame, 2nd support is at 13057

ETHUSD:

Looking at the H4 chart, my overall bias for ETHUSD is bearish due to the current price crossing below the Ichimoku cloud, indicating a bearish market. If this bearish momentum continues, expect price to head towards the 1st support at 1074.23, where the previous swing low is. In an alternative scenario, price could head back up to retest the 1st resistance at 1215.43, where the 23.6% Fibonacci line is.

Areas of consideration:

• H4 time frame, 1st resistance of 1215.43
• H4 time frame, 1st support at 1074.23

BTCUSD:

Looking at the H4 chart, my overall bias for BTCUSD is bearish due to the current price being below the Ichimoku cloud, indicating a bearish market. Expecting price to possibly continue heading towards the 1st support at 15632.00, where the previous swing low is. In an alternative scenario, price could possibly head up towards the 1st resistance at 17297.00, where the 23.6% Fibonacci line is.

Areas of consideration:

• H4 time frame, 1st resistance 17297.00
• H4 time frame, 1st support at 15632.00

S&P 500:

Looking at the H4 chart, my overall bias for S&P500 is bearish due to the current price crossing below the Ichimoku cloud, indicating a bearish market. If this bearish momentum continues, expect price to continue heading towards the 1st support at 3806.91, where the 50% Fibonacci line is. In an alternative scenario, price could possibly head back up breaking the 1st resistance at 3907.07, where the 50% Fibonacci line is before heading towards the 2nd resistance at 4031.44, where the 61.8% Fibonacci line is.

Areas of consideration:

• H4 time frame, 1st support at 3806.91
• H4 time frame, 1st resistance at 3907.07
• H4 time frame, 2nd resistance at 4031.44

Market movers today

There are only few key data releases left for 2022, and this week will be a quiet one ahead of Christmas as the main focus remains on digesting last week's central banks meetings.

German Ifo index will be released for December today, and consensus is looking for a modest uptick following the slightly less negative PMIs and ZEW released earlier, albeit from low levels. Early signs of a trough followed by potentially lower PPI tomorrow would be a welcome development for the German economy, which we expect to have fallen into a shallow recession in Q4. This afternoon, the US NAHB housing market indicator is also expected to remain at recessionary levels.

Overnight, the Bank of Japan will have a monetary policy meeting. We expect the Band of Japan to stick to its outlier position among global central banks and keep its yield curve control unchanged.

Later in the week, markets will listen closely to any signals from central banks, ECB's de Guindos will be on the wires tomorrow, followed by Kazimir on Wednesday. We will also get the US November private consumption data on Friday afternoon - last week's retail sales figures pointed towards cooling private demand.

The 60 second overview

EU: EU member states meet today to talk about whether to lower cap on natural gas prices. The price cap is currently set at EUR275/Mwh, but some member states are pushing for a price cap below EUR200/Mwh. The European natural gas spot price dropped to EUR119/Mwh last week. Last time it was above EUR200/Mwh was in September.

Fed: Cleveland Fed's Mester and San Francisco Fed's Daly on Friday hinted that Fed would need to keep the Fed funds rate at a high level for a period of time to ensure inflation falls back.

Oil: US plans to start refilling its strategic reserves next year. First step is to buy 3mb in February - a small purchase compared to the 180mb of selling. Oil prices dropped on Friday and if anything the market could be relieved that US looks to take its time to rebuild stocks.

FI: The sell-off in the fixed income markets continued on Friday and was primarily a result of the hawkish statements from ECB's Lagarde. The 10Y BTPS-Bund spread has widened some 30bp and credit spreads such as the ITRAX Main and X-over has also widened significantly. However, the 30Y high coupon Danish callables have performed well against Danish government bonds and Bunds and OAS-spreads have tightened for the Danish callable mortgage bonds.

FX: Despite the wide range of central bank decisions, last week ultimately failed to deliver any bigger lasting spot moves. Majors-moves vs USD were all kept within +/- 1% albeit AUD did post a slightly larger setback. Despite the hawkish ECB message the EUR notably traded poorly towards the end of the week highlighting how higher short-end interest rates is not always supportive of the currency when it also weakens the investment case of the asset market. SEK traded poorly towards the end of the week with EUR/SEK now trading back above 11.00. EUR/NOK remains close to the 10.50 mark.

Credit: The credit markets ended last week on a rather negative note. During Friday, iTraxx Main widened 7.3bp to 97.2bp while iTraxx Crossover widened 36.7bp to 506.25bp. The weakness in the CDS market was also visible in the cash bond market, where secondary bond trading and primary markets remained very inactive.

Daily Pivots: (S1) 1.0561; (P) 1.0612; (R1) 1.0639; More...

Intraday bias in EUR/USD remains neutral at this point. Further rally is expected as long as 1.0481 resistance turned support holds. Firm break of 61.8% projection of 0.9729 to 1.0481 from 1.0289 at 1.0754 will pave the way to 100% projection at 1.1041. However, firm break of 1.0481 will confirm short term topping and bring deeper fall to 1.0289 support.

In the bigger picture, focus stays on 38.2% retracement of 1.2348 (2021 high) to 0.9534 at 1.0609. Rejection by 1.0609 will suggest that price actions from 0.9534 medium term bottom are developing into a corrective pattern. Thus, medium bearishness is retained for another fall through 0.9534 at a later stage. However, sustained break of 1.0609 will raise the chance of trend reversal and target 61.8% retracement at 1.1273.

Daily Pivots: (S1) 1.2097; (P) 1.2160; (R1) 1.2200; More...

Intraday bias in GBP/USD stays mildly on the downside as fall from 1.2445 short term top is in progress for 55 day EMA (now at 1.1863). Firm break there will target 38.2% retracement of 1.0351 to 1.2445 at 1.1645. For now, risk will stay on the downside as long as 1.2445 resistance holds, in case of recovery.

In the bigger picture, rise from 1.0351 medium term bottom is at least correcting whole down trend from 1.4248 (2021 high). Further rise is expected as long as 1.1644 resistance turned support holds. Next target is 61.8% retracement of 1.4248 to 1.0351 at 1.2759. Sustained break there will pave the way back to 1.4248. This will remain the favored case as long as 55 day EMA (now at 1.1863) holds.