Elliott Wave and Fibonacci Predictions: USD/JPY - By Capital Forex Group

Elliott Wave and Fibonacci Predictions

Hey traders. Price missed our entry yesterday on USD/JPY, so I jumped in after the retracement around 105,89 and booked 20 pips in the Sidney session. Ok, today we are expecting the most important number of the month, so I believe that everybody who are already involved are very nervous today. Its not good to trade during the news, especially if you don't have the information at the right time. The expectations are not good for the US , but my technical analyses are showing me, that we could see a stronger dollar today. So, any good news for the dollar and technical analysis can bring us some pips today. However, we all now that there are a lot of surprises in this market.

EUR/USD

After yesterdays Trichet's speech I made a step back and checked out the daily and the 4 hour chart on the EUR/USD. Euro is in very strong up trend for 7 years now, so I don't know why would this 1,6000 level be the end of this journey. On daily chart we have nice impulse counting, which is showing me new highs in this or maybe next year. Anyway, on 4 hour chart I came out with possible triangle A-B-C-D-E with 3-3-3-3-3 subwaves . The main reason that convinced me in this possible pattern is, because prices found the support in the very similar zone as previous wave 4 of smaller degree, which could be very strong indicator that right now we are also in wave 4 with the correction of the triangle. So if I am correct h, then we can expect move in to the pink wave B of blue D, labeled on the picture “bounce from 50 to 50” . This means that wave A could bounce from 50% of blue wave C and now we could also see (if there will be good news for the USD), move down to 50 % of the pink wave A, which happens in many cases of the triangle subwaves. Remember, its very hard to catch this trade, especially cause market is very fast during the news, so don't take a risk if you are not ready to face with the consequences (potential loss).

4h chart

USD/JPY

I booked some pips yesterday in the wave b of triangle. Well, the triangles are the most powerful patterns in the market, so if this is true then we could see the break on the upside after the wave e will be complete. Well this is my view because I am the EW trader, so I believe that there are a lot of you out there who are thinking the opposite. I will wait on the news to come out, and if there will good number for the US , then I will jump in with half of the position and put my stops bellow 105,82. My target will be 88 pips higher from wave e of blue iv…

Traders turn the CNBC on and make some money. See you after the weekend. Grega.

10min chart

Gregor Horvat
chief executive officer
forex analyst
Capital Forex Group LLC

These recommendations are for demonstration purposes only. You must do your own research and make your own investment decisions. Past performance is not necessarily indicative of future results. Before forex trading you should understand the risks associated with these trades including the potential loss of the entire premium paid. No representation is made that any account is likely to achieve profits or losses as indicated in our interactive portfolio. Capital Forex Group LLC and its owners are not liable for any losses, monetary or otherwise, that result from the content of this and any newsletter published by Capital Forex Group LLC. Please realize the risk with any investment and consult investment professionals before proceeding. Trading foreign exchange/Forex involves substantial risk of loss and is not suitable for everyone.

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FOREX : Foreign Exchange Market

FOREX is a word play on the term Foreign Exchange Market. It is a market for buying and selling of currencies from all over the world. Certainly, such transactions are bound to be voluminous. It is just an estimate that there are about transactions of $1.5 trillion USD on a daily basis in the FOREX. Now just compare this with the paltry $300 billion USD a day transactions for the US Treasury Bond and the $100 billion a day transactions for the US Stock Exchange.

The FOREX came into existence in 1971 when the fixed currency exchanges were abolished. Currencies no longer had fixed values after that; on the contrary, their rates (mostly taken in comparison with the USD) were fluctuating, and changed on a daily basis. Throughout the seventies and the eighties the FOREX grew steadily, showing more advancement in the later years. The market has stupendously grown from $70 billion USD a day to the staggering amount that it transacts today on a daily basis.

There are actually about five thousand trading institutions in the FOREX. These include international banks, central government banks such as the US Federal Reserve, and commercial companies and brokers for all types of foreign currency exchange. The best thing that shows the unbiased nature of the FOREX market is that it has no fixed headquarters anywhere – it operates primarily from all major cities like New York, Tokyo, London, Hong Kong, Singapore, Paris, Frankfurt, etc. One can even use the telephone or the internet to make the transactions. The major businesses at the FOREX are the buying and selling of products in other countries. Several transactions are also conducted from the currency brokers or traders who stand to make small profits with the daily fluctuations in the market.

Most of the FOREX business is centered on big banks and financial institutions, but it doesn’t mean that the FOREX is inaccessible to small investors. The recent changes in the financial regulations have effectuated this accessibility. Earlier, a minimum transaction size was required to conduct business with the FOREX. But the current rules have made it possible to break large inter-bank units into smaller bits. Each bit is worth as less as $100,000. This makes it possible to each individual investor through loans that are extended for trading, known as leverage. The ratio to control the lots is 100:1. This means, every $1000 USD will allow one to control $100,000 on the FOREX.

The benefits of trading with the FOREX are mentioned below:-

(1) Liquidity of Investments – As the FOREX is a huge market, the funds have a very high degree of liquidity. This is because of the presence of the international banks who provide their bids and carry out a large number of transactions on a daily basis. Therefore, there is always a buyer or seller for any type of currency.

(2) Highest Degree of Accessibility – The FOREX is open 24 hours a day for 5 days a week. Every Monday morning the exchange opens at Australian Standard Time and closes on Friday afternoon at New York time. Greater accessibility is provided because the transactions can be conducted from the person’s home or office.

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It must be understood by now that for the FOREX to work effectively, the currencies must always be traded in pairs. For instance, the Japanese yen must be traded against the euro. When one kind of currency is sold, there should be another to be bought in its stead.

The profit happens because there is always mobility between the different currencies. Even if there is a miniscule change in the exchange rate, then it could mean substantial changes in the profits due to the large amount of money involved in the transactions. People are thronging to the FOREX and not any other institution due to the trust that they have in it. To add to the advantage, the market is absolutely well-advanced and uses sophisticated software for dealing out its transactions.

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