General Notes:
The topic of today is GOLD. You saw it reach 1250 in the height of the "flash-crash" and then starting to reverse, even when the US and European markets continued to go down. So we ask: Is it a flight to quality play, the ultimate currency, a jewelry commodity or an ancient relic?
Our opinion is that it is all that, but that it's financial aspect is becoming more and more obvious with time. The flight to quality is also a factor but a brief, and dissipating, quickly when the markets are showing signs of stabilization.
GLD (the Gold ETF) has caused a mass demand for GOLD that has eclipsed its role as jewelry, or any other reason that existed to buy it before. Now, We advise you to look at GOLD this way:
If it goes up when everything is going up, fine (Maybe some INFLATION). If it goes up when everything is going down: flight to safety. If it goes down when everything is going down, then DEFLATION (remember 2008?).
In any case, the break of its rising weekly trend line (now at 1120) will cause devastation in the long term positions of this asset.
AUD/USD Visual Trading Update
Price and Indicators Technical Overview:
The break and test of the weekly rising trend line was really important here. The pair is down hard, even when it has one of the highest interest rates attached to it. It shows you that fundamentals are less important than the technical's and that in this case the liquidation of the pair have background reasons we cannot see in the media. We think it is attached to China. Oversold, but as we saw in the EURO, it can kill if you take a position for the rebound too soon.
EUR/USD Visual Trading Update
Price and Indicators Technical Overview:
Last time we said "The question now is if the pair will reach the lower boundary of the descending channel. Strong support says now, momentum says yes. We will see. Look at the general notes about our view here. OVERSOLD! But it can continue…." And it did reach the boundary. Now what? Is it not enough or will the currency finds some footing here. We need to see more price action to decide.
USD/JPY Visual Trading Update
Price and Indicators Technical Overview:
The pair broke the ascending channel and then… The only thing that we want to mention here is the scope of the rebound: Wow! Could it be that the hands of the Japanese Central Bank are in this rebound to prevent the YEN to appreciate too much? If it was an intervention, then they got a re-enforcement from the measures of the ECB. A re-entry inside the ascending channel limits will change the bias to LONG but as of now it's all bearish.
Charts Legend:
3 Price Windows: Main (Daily), Right Side (Up: 4 Hours, Down: Weekly)
INDICATORS:
Simple Moving Average (20): Green
Average of Average (9 weighted): Violet
Price Channel (20): Orange
Volume: Black
Daily separations: Black Dots
Support & Resistance price areas: Light Blue Areas
Trend lines and Channel Boundaries: Blue
Elliott Waves Counts: Black and Blue numbers
RSI (10): Blue, ADX(20): Blue
Green Wave Capital LTD (c) INFO@GreenWaveCap.com
