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Elliott Wave Analysis: SPX Calling Correction Lower
SPX short-term Elliott wave analysis suggests that the rally from 4/02/2018 low to $2792.25 ended the intermediate wave (1). Down from there, correction against that cycle remains in progress in 3, 7 or 11 swing structure. Also, it’s important to note here that the decline from $2792.25 peak shows an overlapping price action thus suggesting that the correction is taking place in a corrective manner i.e either Double three or Triple three structure.
Down from $2792.25, Minor wave W unfolded as a double three structure with a combination of 3,3,3 swings in each leg. Minute wave ((w)) of W ended at $2743.10, Minute wave ((x)) of W ended at $2774.86 and Minute wave ((y)) of W ended at $2698.67 low. Up from there, Minor wave X bounce remains in progress to correct cycle from 6/13 high ($2792.25) as a Zigzag structure where Minute wave ((a)) ended at $2746.09 and Minute wave ((b)) remains in progress as a running triangle structure. Near-term focus remains towards $2745.32-$2756.36, which is the 50%-61.8% Fibonacci retracement area of the cycle coming from $2792.25 high to complete Minute wave ((c)) of X. Afterwards, the index is expected to continue lower in Minor wave Y to correct cycle from 4/02/2018 low. We don’t like selling the proposed pullback.
SPX 1 Hour Elliott Wave Chart
Euro-Zone’s Service Sector Activity Regains Strength In June
For the 24 hours to 23:00 GMT, the EUR rose marginally higher against the USD and closed at 1.1660
On the data front, Euro-zone's final service PMI rose more than estimated to a level of 55.2 in June, compared to a 16-month low reading of 53.8 reported in the prior month. Market had anticipated the PMI to climb to a level of 55.0. The preliminary figures had indicated an advance to a level of 55.0.
Moreover, Germany's final services PMI rebounded to a 4-month high level of 54.5 in June, following market expectations for an advance to a level of 53.9. The preliminary figures had indicated a rise to 53.9. In the prior month, the PMI had registered a reading of 52.1.
In the US, data indicated that the US MBA mortgage applications eased by 0.5% on a weekly basis in the week ended 29 June, following a drop of 4.9% in the prior week.
In the Asian session, at GMT0300, the pair is trading at 1.1662, with the EUR trading a tad higher against the USD from yesterday's close.
The pair is expected to find support at 1.1635, and a fall through could take it to the next support level of 1.1607. The pair is expected to find its first resistance at 1.1686, and a rise through could take it to the next resistance level of 1.1709.
Moving ahead, investors would keep an eye on Germany's factory orders for May, slated to release in a while. Later in the day, the US FOMC meeting minutes and initial jobless claims along with the US Markit services PMI and ADP employment change, both for June, will keep the investors on their toes.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
Britain’s Services PMI Surprisingly Expanded To An 8-Mmonth High Level In June
For the 24 hours to 23:00 GMT, the GBP rose 0.29% against the USD and closed at 1.3230, as UK's services PMI unexpectedly climbed to a level of 55.1 in June, posting its highest level in 8-months, driven by robust growth in new work and raising expectations for August rate hike. Markets had envisaged for an unchanged reading. In the preceding month, the PMI had recorded a reading of 54.0.
In the Asian session, at GMT0300, the pair is trading at 1.3228, with the GBP trading slightly lower against the USD from yesterday's close.
The pair is expected to find support at 1.3183, and a fall through could take it to the next support level of 1.3137. The pair is expected to find its first resistance at 1.3262, and a rise through could take it to the next resistance level of 1.3295.
The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.
Japanese Yen Trading On A Stronger Footing In The Asian Session
For the 24 hours to 23:00 GMT, the USD declined 0.05% against the JPY and closed at 110.48.
In the Asian session, at GMT0300, the pair is trading at 110.43, with the USD trading 0.05% lower against the JPY from yesterday's close.
The pair is expected to find support at 110.28, and a fall through could take it to the next support level of 110.13. The pair is expected to find its first resistance at 110.60, and a rise through could take it to the next resistance level of 110.77.
Looking forward, Japan's over household spending data and labour cash earnings, both for May, set to release overnight, will keep investors on their toes.
The currency pair is showing convergence with its 20 Hr moving average and trading below its 50 Hr moving average.
Swiss Franc Extends Its Losses In The Morning Session
For the 24 hours to 23:00 GMT, the USD rose slightly against the CHF and closed at 0.9925.
In the Asian session, at GMT0300, the pair is trading at 0.9933, with the USD trading 0.08% higher against the CHF from yesterday’s close.
The pair is expected to find support at 0.9913, and a fall through could take it to the next support level of 0.9894. The pair is expected to find its first resistance at 0.9946, and a rise through could take it to the next resistance level of 0.9960.
Going ahead, traders would await Switzerland’s inflation data for June, scheduled to release in a while.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
Loonie Trading A Tad Lower This Morning
For the 24 hours to 23:00 GMT, the USD declined marginally against the CAD and closed at 1.3141.
In the Asian session, at GMT0300, the pair is trading at 1.3145, with the USD trading a tad higher against the CAD from yesterday’s close.
The pair is expected to find support at 1.3125, and a fall through could take it to the next support level of 1.3104. The pair is expected to find its first resistance at 1.3164, and a rise through could take it to the next resistance level of 1.3182.
Amid lack of economic releases in Canada today, traders would focus on global macroeconomic events for further direction.
The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.
Aussie Reverses Its Losses In The Asian Session
For the 24 hours to 23:00 GMT, the AUD declined slightly against the USD and closed at 0.7384.
LME Copper prices declined 1.9% or $125.5/MT to $6459.0/MT. Aluminium prices declined 2.1% or $44.5/MT to $2120.5/MT.
In the Asian session, at GMT0300, the pair is trading at 0.7385, with the AUD trading a tad higher against the USD from yesterday’s close.
The pair is expected to find support at 0.7364, and a fall through could take it to the next support level of 0.7343. The pair is expected to find its first resistance at 0.7410, and a rise through could take it to the next resistance level of 0.7435.
Looking forward, investor would closely monitor Australia’s AiG performance of construction index for June, slated to later in the day.
The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.
Gold: Yellow Metal Trading Flat In The Morning Session
For the 24 hours to 23:00 GMT, Gold rose 0.24% against the USD and closed at USD1257.40per ounce, amid weakness in US dollar.
In the Asian session, at GMT0300, the pair is trading at 1257.40, with gold trading flat against the USD from yesterday’s close.
The pair is expected to find support at 1254.27, and a fall through could take it to the next support level of 1251.13. The pair is expected to find its first resistance at 1261.47, and a rise through could take it to the next resistance level of 1265.53.
The yellow metal is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.
Silver: White Metal Trading On A Weaker Footing In The Morning Session
For the 24 hours to 23:00 GMT, Silver rose 0.40% against the USD and closed at USD16.14 per ounce, tracking rise in gold prices.
In the Asian session, at GMT0300, the pair is trading at 16.125, with silver trading 0.06% lower against the USD from yesterday’s close.
The pair is expected to find support at 16.04, and a fall through could take it to the next support level of 15.96. The pair is expected to find its first resistance at 16.20, and a rise through could take it to the next resistance level of 16.28.
The white metal is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.
Crude Oil: Oil Trading Extends Its Losses In The Asian Session
For the 24 hours to 23:00 GMT, Crude Oil declined 0.56% against the USD and closed at USD74.14 per barrel.
In the Asian session, at GMT0300, the pair is trading at 73.88, with oil trading 0.35% lower against the USD from yesterday’s close, after the US President, Donald Trump demanded OPEC to reduce crude oil prices..
The pair is expected to find support at 73.36, and a fall through could take it to the next support level of 72.84. The pair is expected to find its first resistance at 74.54, and a rise through could take it to the next resistance level of 75.20.
Crude oil is trading below its 20 Hr and 50 Hr moving averages.
