Elliott waves forex signal for USD/JPY

Let us start with the monthly forex trading chart, which is already a bit older but it gives a very good forex trading signal of where we are in the long-term cycle of this currency pair which is heavily traded by traders and investors in the forex markets.

From the '70s to 2011 a forex trading pulse movement has developed, which can be defined as wave [A] of the grand cycle. After the bottom of 2011, we are in the development of wave [B].  

A potential target for the development of this wave, in the long run, is the area around 220-260. I would like to make a small digression here for anyone who thinks that Central Banks can manipulate the long-term trend - they CAN NOT, neither any forex brokers nor any entity providing forex services and trading platforms.

This is an old forex trading chart of mine that traces the development in the forex markets of the 5th wave. Throughout the collapse, the Bank of Japan has been very busy trying to stop the appreciation of the yen and is constantly intervening directly in the forex markets (marked with red arrows on the chart), but on the weekly forex chart these interventions remain just noise and the trend continues where it is going. 

The irony is that at the bottom the BOJ is abandoning interventions and saying it will start lending to Japanese foreign companies to acquire assets. However, this bitter lesson is very instructive and definitely proves that the long-term trend cannot be manipulated and this could not affect the forex markets or any traders who are involved in forex trading.

Let's go back to today and look at the weekly forex chart below.

Let's go back to the present time. After the bottom of 2011. I consider the rise to 125.80 as an impulse with two extended waves (which is very rare) or A-B-C (zig-zag) correction for wave (A) or (W), respectively. 

Then we have a long correction for wave (C) or (X), which has developed as a complex correction or double zig-zag with shortened Y wave. In my opinion, this correction has ended at the bottom of January 2021 and we are developing the next ascending cycle. In the longer term, the potential target of this upward cycle is the area around 146-150.

On the daily forex trading chart, I am currently considering two trading scenarios. According to the first (with red on the chart), we are developing wave 4 and there will be an upward movement for wave 5 with a potential target area around 118. 

The other possible option (with blue on the chart) is yet to begin the development of wave 3, this means direct acceleration to zone 121, lateral consolidation, and rise to about 124-125.

Elliott waves signal for Silver

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Markets are on alert for rate rises in both the eurozone and the United States

Wall Street shares finished broadly lower yesterday, while European stocks rose following five straight weeks of declines and European bond yields soared on speculation of monetary tightening. 

Markets are on alert for rate rises in both the eurozone and the United States after the ECB last week was considered to have adopted a more hawkish tone. The United States reported stronger-than-expected jobs and earnings data. European Central Bank President Christine Lagarde yesterday calmed some of those jitters, saying there were no signs that measurable monetary policy tightening would be required. 

Economic Calendar

Major Wall Street stock indexes were mixed throughout the session on Monday before ending down as markets digested mixed quarterly results from mega-caps Amazon.com Inc. and Facebook owner Meta Platforms. The market's inability to rally on Friday's strong payroll data, and generally poor stock reactions to Q4 results despite healthy earnings delivery, illustrate the overly bearish market sentiment at the moment.

Dow Jones Industrial Average

The Dow Jones Industrial Average gained 0.00%. The best performers of the session on the Dow Jones Industrial Average were Boeing Co, which rose 2.65% or 5.47 points to trade at 211.92 at the close. Meanwhile, Chevron Corp added 1.97% or 2.67 points to end at 138.55 and American Express Company was up 1.09% or 2.02 points to 187.87 in late trade. The worst performers of the session were Microsoft Corporation, which fell 1.63% or 4.99 points to trade at 300.95 at the close. Merck & Company Inc. declined 1.25% or 0.98 points to end at 77.58 and Dow Inc. was down 1.14% or 0.69 points to 59.91.

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NASDAQ 100

The NASDAQ index declined 0.58%. The top performers on the NASDAQ Composite were Kaival Brands Innovations Group Inc. which rose 51.40% to 1.620, Origin Agritech Ltd which was up 34.81% to settle at 6.390 and Luokung Technology Corp which gained 24.31% to close at 0.630. The worst performers were Dermata Therapeutics Inc. which was down 34.68% to 1.45 in late trade, Cerence Inc. which lost 31.41% to settle at 43.61 and Nisun International Enterprise Development Group Co Ltd which was down 24.83% to 1.09 at the close.

Oil

Oil slipped to around $92 a barrel today ahead of the resumption of indirect talks between the United States and Iran, which may revive a nuclear agreement that could eventually allow more oil exports from the OPEC producer. 

A deal could allow over 1 million barrels per day of Iranian oil, equal to over 1% of global supply, back onto the market. The talks over the nuclear deal will resume today in Vienna. U.S crude fell 52 cents, or 0.6%, at $90.80. Eight rounds of indirect talks between Tehran and Washington since April have yet to result in an agreement on resuming the 2015 nuclear deal. 

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Differences remain about the speed and scope of lifting sanctions on Tehran. Oil also came under pressure from the prospect of an increase in U.S crude inventories. Analysts estimate inventories have risen by 700,000 barrels in the week to Feb. 4. The first of this week's two supply reports, from the API, is out will be out today.

Precious and Base Metals

Gold prices climbed to a more than one-week high yesterday, supported by inflation worries and lingering geopolitical risks, as markets awaited key U.S inflation data for cues on the Federal Reserve's interest rate hike trajectory. Spot gold rose 0.7% to $1,820.23 per ounce, after hitting its highest level since Jan. 27 at $1,820.96 earlier in the session. 

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There's a bit more flight-to-safety buying in the gold market. The main concern right now is where are we headed with inflation and how aggressive the Fed will be. Benchmark 10-year U.S. Treasury yields hovered near their highest levels since December 2019 after an upbeat U.S. employment report on Friday. U.S. inflation figures for January are due on Thursday, with markets now pricing in a one-in-three chance the Fed might hike by a full 50 basis points in March. 

Although gold is considered a hedge against higher inflation and a safe store of value in times of uncertainty, higher rates raise the opportunity cost of holding non-yielding bullion. Russia-Ukraine tensions are also on the back of everyone's minds. White House national security adviser Jake Sullivan said on Sunday that Russia could invade Ukraine within days or weeks but might still opt for a diplomatic path. 

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Gold and silver prices were boosted in part by a U.S. dollar index that has dropped sharply from its late-January high. Meanwhile, speculators cut their net long COMEX gold position in the week to Feb. 1, data showed on Friday. Among other precious metals, silver jumped 2.4% to $23.02 per ounce, platinum declined 0.4% to $1,020.02, and palladium fell 1% to $2,261.51.

Traditional Agricultures

Soybean edged lower, easing from an eight-month high hit in the previous session, ahead of a U.S Department of Agriculture supply and demand report but concerns over dry weather conditions in South America limited losses. Corn and wheat futures also lost ground, shedding some of the previous session's gains. The market continues to revise its assessment of South American crops. The market is also seeing plenty of evidence of export demand from the U.S. to bolster that bullishness. Markets are positioning ahead of world grain and oilseed supply and demand forecasts from the USDA on Wednesday.

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All information has been prepared by TraderFactor or partners. The information does not contain a record of TraderFactor or partners prices or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may read it. Past performance is not a reliable indicator of future performance.

Euro eased after ECB President calmed market expectations of a quick hike in interest rates

• Sterling rose against the euro on Monday, catching a break after a sharp slide last week
• The Canadian dollar rallied yesterday by the most in two months against its U.S counterpart
• The Australian and New Zealand dollars were trying to sustain a rally today in the Asian session

The dollar and the euro both eased on Monday after European Central Bank President Christine Lagarde calmed market expectations of a quick hike in interest rates that pushed regional bond yields in Europe up to multi-year highs.

There is no need for big monetary policy tightening in the eurozone as inflation is set to decline and could stabilize around the ECB's target of 2%, Lagarde told a European Parliament hearing. Last week the ECB opened the door to a rate hike later in 2022 as inflation risks rose, while data showing an unexpected jump in U.S jobs created in January also raised speculation of a faster timetable for the Federal Reserve to hike rates. 

Economic Calendar

The new rate expectations for both the Fed and ECB pit the dollar and euro against each other as to which will gain an upper hand. U.S consumer price data to be released on Thursday is poised to be a key data point determinant. The euro-dollar will be in a kind of tug of war between these two forces, but ultimately with CPI in the U.S., we're probably due for a bit more of a dollar recovery.

A Reuters poll of economists showed they expect year-over-year CPI to have climbed to 7.3% in January. The major currencies traded in a tight range near break-even. The dollar index fell 0.045%, with the euro down 0.03% to $1.1443. The ECB last week got the ball moving in a positive direction for the euro. 

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Now the focus has shifted to U.S. inflation, which the market will use to figure out whether the Fed goes by 25 basis points or 50 basis points next month. Markets have now priced in a one-in-three chance the Fed might hike by a full 50 basis points in March, and reasonable chance rates will reach 1.5% by year-end. 

The European common currency hit its highest since mid-January on Friday, driven by the hawkish turn from the ECB. Not everyone is convinced of a hawkish ECB tilt. We don't believe the ECB is bracing for the sudden acceleration of tightening. We still see the Fed as being on track to move well ahead of the ECB, providing support for the dollar. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was down 2.4 basis points at 1.298%. The yield on two-year German bonds fell by 3.5 bps to -0.29%, after hitting its highest since September 2015 at -0.21%.

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Euro

The single currency leaped 2.7% last week after a hawkish shift in tone at the European Central Bank. Stunningly strong U.S labor data last week has put extra focus on inflation - forecast at a four-decade high 7.3% - in the lead up to March's Federal Reserve meeting. Futures markets are pricing an almost 1-in-3 chance of a 50 basis point rate rise. Overall, the EUR/USD traded with a low of 1.1413 and a high of 1.1461 before closing the day around 1.1441 in the New York session.

Yen

The Japanese Yen traded slightly lower against the U.S Dollar as traders awaited U.S inflation data, wary it could unleash bets on faster interest rate hikes. The surprise beat by the non-farm payroll numbers (which we were warned by Fed officials and the White House would be very weak due to Omicron) leaves the Fed in unexpected territory. Overall, the USD/JPY traded with a low of 114.89 and a high of 115.36 before closing the day around 115.09 in the U.S session.

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British Pound

The British Pound rose to catch a break after a sharp slide last week triggered by the ECB message it no longer ruled out a 2022 interest rates hike which overshadowed the Bank of England’s rate rise. BoE Governor Andrew Bailey may sound hawkish but only because he faces a more uncomfortable trade-off between inflation and growth than others Overall, the GBP/USD traded with a low of 1.3488 and a high of 1.3549 before closing the day at 1.3534 in the New York session.

Canadian Dollar

The Canadian Dollar rallied by the most in two months against its U.S counterpart, as investors took advantage of Friday's selloff following weak domestic jobs data to buy the currency at cheaper levels. On Friday, the loonie touched its weakest intraday level since Jan. 28 as data showed the Canadian economy losing more jobs than expected in January. Overall, USD/CAD traded with a low of 1.2655 and a high of 1.2754 before closing the day at 1.2664 in the New York session.

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Australian Dollar

The Australian Dollar trying to sustain a rally as an improved tone in global equity markets and strength in commodity prices offered a break from recent selling. The Reserve Bank of Australia (RBA) continues to argue that inflation is not as much of a threat in Australia as in some other developed nations and it thus has scope to be patient on interest rates. Overall, AUD/USD traded with a low of 0.7169 and a high of 0.7228 before closing the day at 0.7171 in the New York session.

Euro-Yen

EUR/JPY is trading below 14, 50 and 100 days moving average. Fast stochastic is giving a bearish tone and MACD is also issuing a bearish stance. The Relative Strength Index is above 41 and lies below the neutral zone. In general, the pair has lost 0.15%.

Sterling-Yen

Currently, GBP/JPY is trading below 14 and above 50, 100 days moving average. Fast stochastic is issuing a bearish tone and MACD is also indicating a bearish stance. The Relative Strength Index is above 45 reading and lies below the neutral zone. On the whole, the pair has lost 0.01%.

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Aussie-Yen

Currently, the cross is trading above 14, 50 and below 100 days moving average. Fast stochastic is giving a bearish tone and MACD is also indicating a bearish stance. The Relative Strength Index is above 43 reading and lies below the neutral region. In general, the pair has gained 0.63%.

Euro-Sterling

This cross is currently trading below 14, 50 and below 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is also issuing a bullish signal. The Relative Strength Index is above 44 and lies above the neutral region. Overall, the pair has lost 0.17%.

Sterling-Swiss

This cross is trading above 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish stance and MACD is also indicating a bearish tone. The Relative Strength Index is above 46 and lies above the neutral region. In general, the pair has lost 0.14%.

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All information has been prepared by TraderFactor or partners. The information does not contain a record of TraderFactor or partners prices or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may read it. Past performance is not a reliable indicator of future performance.

Trade Zone Week Ahead with David Floyd

We're into the second week of our David Floyd guest spot on our new Trade Zone series, and today he's here to help you get your new trading week off to a good start with our latest Week Ahead. 

A professional forex and futures trader with over 25 years of experience, as well as being president of Aspen Trading Group, David takes you through a few of the key support and resistance levels he's currently watching as markets open this morning. Tune in below to find out what happened and what might occur with the S&P 500, the Aussie Dollar, and a host of other assets as a new trading week begins.

Eightcap Trade Zone Week Ahead with David Floyd (Aspen Trading) | 7th - 11th February

Don't forget to join David again this coming Thursday at 1 am GMT as he sits down and gives us another update on how the markets have played out so far and what he's looking at as we head into the weekend. There will also be an opportunity for you to ask questions to David directly about the other trading setups happening this week.

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Crude oil prices, which have already rallied about 20% this year, are likely to surpass $100 per barrel

 U.S stocks ended mostly higher Friday, with all three major benchmarks scoring a second straight week of gains after investors digested a much stronger-than-expected January jobs report that underlined expectations for an aggressive round of rate increases by the Federal Reserve. 

The NASDAQ Composite led the way higher after strong results from Amazon.com Inc. For the week, the Dow gained about 1.1%, the S&P 500 rose 1.6% and the NASDAQ climbed 2.4%. Each index notched a second straight week of gains, according to Dow Jones Market Data. Stock market trade was choppy after the government reported Friday that the U.S economy added 467,000 jobs in January and hiring was much stronger at the end of 2021 than originally estimated. 

Economic Calendar

The unemployment rate ticked up to 4% from 3.9%, while the percentage of people in the labor force ticked up to a pandemic high of 62.2%. The strong January reading served to reinforce expectations the Federal Reserve will be aggressive in lifting interest rates.

Dow Jones Industrial Average

 The Dow Jones Industrial Average lost 0.06%. The best performers of the session on the Dow Jones Industrial Average were Salesforce.com Inc., which rose 3.04% or 6.46 points to trade at 219.23 at the close. Meanwhile, JPMorgan Chase & Co added 2.60% or 3.86 points to end at 152.56 and Goldman Sachs Group Inc. was up 2.43% or 8.72 points to 367.60 in late trade. The worst performers of the session were 3M Company, which fell 2.23% or 3.66 points to trade at 160.73 at the close. Walgreens Boots Alliance Inc. declined 1.82% or 0.90 points to end at 48.60 and Procter & Gamble Company was down 1.59% or 2.61 points to 161.53.

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NASDAQ 100

 The NASDAQ index added 1.58%. The top performers on the NASDAQ Composite were Sphere 3D Corp which rose 31.17% to 3.030, eGain Corporation which was up 26.82% to settle at 12.74, and Iradimed Co which gained 23.66% to close at 48.60. The worst performers were SkyWest Inc. which was down 22.37% to 29.47 in late trade, G Medical Innovations Holdings Ltd which lost 21.80% to settle at 3.30, and Vanda Pharmaceuticals Inc. which was down 17.88% to 12.03 at the close.

Oil

Oil prices bounced around today in see-saw trading, with some investors taking profits after signs of progress in the U.S.-Iran nuclear talks while others kept bullish sentiment bolstered by rising consumption amid ongoing supply constraints. U.S crude fell 33 cents, or 0.4%, to $91.98 a barrel, having dived to as low as $91.35 earlier in the session and risen to as high as $92.73. 

Investors scooped up short-term profits on the news suggesting progress in the U.S.-Iran nuclear talks, but fresh buying kicked in again after the technical corrections as global supply is expected to stay tight. U.S. President Joe Biden's administration on Friday restored sanctions waivers to Iran to allow international nuclear cooperation projects, as the talks on the 2015 international nuclear deal enter the final stretch. If the United States lifts sanctions on Iran, the country could boost oil shipments, adding to global supply.

Crude prices, which have already rallied about 20% this year, are likely to surpass $100 per barrel.

Precious and Base Metals

Gold prices hit a more than one-week peak today, as inflationary pressures due to surging oil prices helped cushion the impact of a U.S Treasury yield rally after an upbeat jobs report, while a drop in equities also boosted bullion's appeal. Spot gold rose 0.2% to $1,810.85 per ounce, after hitting its highest since Jan. 27 at $1,814.91 earlier in the session. 

Elliott waves market analysis for Silver 

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U.S gold futures rose 0.2% to $1,811.70. The largest component of inflation currently, beyond the supply chain issues, is oil prices. And this is a problem no matter how high you move interest rates. 

Gold is getting a little bit defensive, realizing that we could be in this state for hyperinflation. Oil prices rose on Monday, with Brent crude touching its highest since October 2014. Limiting gold's gains, the dollar firmed, while yields on benchmark 10-year U.S. Treasuries stayed close to their highest levels since December 2019 hit on Friday. 

U.S. inflation data for January is due on Thursday and strong data could further fuel Federal Reserve's plan to raise interest rates after the U.S. employment report showed nonfarm payrolls jumped by 467,000 jobs last month. After the U.S. jobs data, the market is pricing in more than five rate hikes at the moment and this week's inflation data will provide further cues on this. 

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Bullion is considered a hedge against inflation and geopolitical risks, yet rate hikes would raise the opportunity cost of holding non-yielding bullion. Lingering tensions between the West and Russia over Ukraine also supported gold. Elsewhere, silver rose 1.2% to $22.74 per ounce, platinum was steady at $1,023.52, and palladium rose 0.7% to $2,301.19. Copper and aluminum prices rose on Friday, supported by thin inventories, but worries that central bank rate hikes would curb growth and metal demand capped gains. The U.S. economy created far more jobs than expected in January despite the disruption to consumer-facing businesses from a surge in COVID-19 cases, data showed.

Traditional Agricultures

Soybean futures were steady to mostly higher on Friday near an eight-month peak as some traders pocketed profits from strong gains this week, but the market remained underpinned by concerns about weather-reduced yields in South America.

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All information has been prepared by TraderFactor or partners. The information does not contain a record of TraderFactor or partners prices or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may read it. Past performance is not a reliable indicator of future performance.

Elliott waves signals for S&P500

On the weekly chart, we are at the end of the business cycle( in wave 5 from wave (5) from wave (V) ). This means that the upside potential is very limited. For those who invest in the long term is very important to know, that after one more bullish wave, the market will go in a very different business cycle and the upcoming correction will be unknown for them. Be prepared for that.

On the daily chart, we are in wave 4. One possibility is that wave 4 has ended, but the structure suggests that we are in our alternative count (with dark blue on the chart above). This means that wave 4 is developing like flat or double zig-zag, another possibility is a triangle.

In this case, this upward move is either wave B or wave X. If the correction is double zig-zag wave B or X will end any moment about this level 4585p for SP500 and 35500 for the DOW. After the upward move is completed I can be more specific about the type of correction. A broke on 4500 for SP500 and 34970 for the DOW  is the signal that this move up is finished

 After that, it will develop wave C or Y. The potential target for this down move is 4150 for SP500  and 32800 for the DOW.

In the case that wave 4 will be a triangle there are more sideways moves without new lows or new highs. In this case, we are now again in wave B, but here wave B can be a little deeper about 4600-4680 for SP500 and 35600-36000 for the DOW.