General Notes:
Risk aversion is back and we feel that it could stay a while. The problem is that the EURO is driving everything down and we cannot count on the people who decide in the Euro Zone to fix it quickly enough.
The power struggle between the ECB and the countries governments is causing the lack of confidence in the EU currency, and it is difficult to recover from such a state of mind. China is also starting to cause a lot of worry because the idea was of a decoupling between the East and the West, where the growth of the East will offset the depression of the west.
If both are going down who will save the world from a devastating deflation? We hope for a technical rebound to set the scales to a normal place again.
AUD/USD Visual Trading Update
Position implied by the technical situation: LONG
Price and Indicators Technical Overview:
After making a double bottom near the 78.6% area, the pair is starting to show some strength again. China is a heavy duty burden here and could cause the pair to sink lower. The SL area should be the double bottom level (0.8750)
EUR/USD Visual Trading Update
Position implied by the technical situation: OUT
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 enough or will the currency find some footing here. We need to see more price action to decide.
USD/JPY Visual Trading Update
Position implied by the technical situation: OUT
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. We are now out because the whole correction was performed and price is at the test area. What one day can do these days! A re-entry inside the ascending channel limits will change the bias to LONG.
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
