Ok guys. I know most of you already know that there are big and I mean very big players in the market whose every click to enter or exit a trade can sent price volatility through the floor or through the roof.
Nevertheless, I feel compelled to show you guys this video that was recorded on Bloomberg on how markets are “manipulated” and which makes retail traders basically at the mercy of the big boys.
Using Elliot Wave Analysis on the daily gold chart, we can see that gold has just completed its 8 wave cycle. The bullish run on the 17th August 2009 ended with wave 5 on the 2nd of December 2009, breaching the price of 1200. From there, gold went into the ABC correction phase which brought it all the way down to the price of about 1050. A correction of approximately $150 within a 9 week time span. To further support the argument for more bullish moves for gold, we can also see an inverse head and shoulders pattern. A strong indication of a continuing upward trend.
I am going to share with you how I would trade the euro next week when the market opens. The chart analysis here is done on the 1hour time frame.
Price closed this week at 1.275. Price nearly touched the 1.25 price level on the 6th May and turned fast from that level upwards to close at 1.26. We could see that this fast price action have resulted in "Tails" being formed and traders have subsequently pushed the price up in a corrective rebound to the 1.28 level, forming a range of about 300 pips.
Euro Technical Analysis using the Monthly Time Frame. Eur/Usd have been falling since the beginning of the year. The falls in the euro have pushed me to look at the monthly charts to give me a sense of where the euro might be heading in the weeks and months ahead.
On the Downside: Euro is now within its downtrend channel indicated by the downtrend pink lines that I have drawn. If that downtrend channel is to be the dominating force behind euros push lower, we could see euro going down all the way to the 1.18 and 1.20 region. That would also mean a breakout from the upward trend channel as indicated by the green lines that I have drawn.
On the Upside (Corrective move): The uptrend line is at the moment acting as support, together with the horizontal support line at around the 1.25 to 1.27 levels. A corrective move from here could mean that euro might just go back up to the 1.359 levels, also proving to be the resistance line dating back all the way early 2005s. If euro does hit that level and starts a reversal back down, you guys need to watch out as euro could fall even below the 1.2 level and we could see euro at the 1.15 levels.
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