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We have seen nice bounce on stocks while the USD has turned lower, which suggests more risk-on in weeks ahead.

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Traders, with Forex Analytix team we put together blog post 2020 US Presidential Elections and Possible Market Outcomes. I also shared some of my charts and analysis there, a piece that is shared below. For full post click here

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Elliott Wave Charts Suggests: “After the storm the sun shines again”

It appears that Libya’s decisions regarding the increase of oil output was just another catalyst that sent oil prices lower last Friday. It’s just one of the issues that energy is facing; much more important is of course a spread of global lockdowns so demand is decreasing significantly in the last two weeks which causes a sell-off into wave C of the Elliott Wave pattern when looking at the price action down from September highs. Well, we see a very strong, three-leg drop for now, but “after every storm the sun shines again”, so despite a very aggressive sell-off we believe that oil is approaching an interesting area of supports. I am watching $34 as a first potential support but I realize that lockdowns may not end anytime soon so the $30.00 can prove to be an even more important level. Ideally energy will make a five wave bounce from there which is needed to call the end of the correction. I suspect oil prices will be back in recovery mode at the start of next year.

Similarly with energy we also see a sharp drop in stocks with the SP500 reversing south into a wave C as well. A good support for this market is the area around 3100-3250, so maybe we are going to see the first evidence of a bounce right after the US elections. We know that some may be looking for a 3rd wave sell-off rather than wave C, which is fine and could be a valid view, but I personally think that it’s always better to label the wave count in the direction of a trend, which is clearly up on higher time frame charts.

Last but not least, gold is another very interesting asset that will always be on any investor’s watchlist, especially during unstable periods like the one we are facing now. With QE in full force, I think metals still have plenty of room to rise. From an Elliott wave point of view I see gold in a corrective fourth wave pullback that can stop at around $1800, where the price retracement would be equal to the one we saw back in March, slightly below 100 SMA.





 
 

 

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Australia records zero Covid-19 cases for the first time in five months, while we see lock-downs in EU and more cases each day now also in the US. As such, it seems that AUD will have room to recover, and maybe that's going to be soon if may stocks will find a support after the US elections, especially if Trump wins.

From an Elliott Wave perspective we see AUDUSD making a corrective pullback, now already at first 0.7 support but second and even more important one is at 0.68 if pullback is deeper.
 

 

 

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During regular weekend charting I was looking at the SP500 and compared current development to 2016 US elections when stocks turned up aggressively higher. But before market resumed higher we saw a top in August then retracement followed by a bounce after three leg correction. This time, I see very similar development, which can be the case if Trump wins. In such case we should watch 3k. However, I am worried that coronavirus may actually "steal" the move, and take a deeper pullback or cause ongoing consolidation if number of cases will continue to rise with upcoming lock-downs like in EU. Even if Trump wins and cases go up, he will be forced to take actions.

Be careful this week, because it's not only the US elections, also plenty of other events and data, such as RBA and BOE rates, US ISM PMI, FOMC statement and even NFP on Friday.
 

GH





 

 

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Gold is very interesting asset that will always be on investors watchlist, especially during unstable period like we are facing now, and with QE in full force, I think metals has plenty of room to rise.

From a technical point of view we see Gold moving to the downside since August, but the price action is very slow and choppy with overlapping wave structure, which actually suggests a corrective movement, ideally a complex W-X-Y decline within a higher degree wave IV) that can find the support around 1800 level. This level is also interesting if we consider that it comes in at 100 Daily SMA with a similar length-retracement compared to March, while from EW perspective it can be completing the final wave C of Y. So, watch out for a limited downside and be aware of a bullish reversal as we approach the end of 2020.

To me it’s important to see a minor bounce in five waves, before I can call end of a corrective retracement which would be then a constructive looking for opportunities on the long side.

Trade well!




 

 

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EURUSD found the support recently and rallied up to 1.1880 where we saw some reversal in the last few sessions, from the upper trendline resistance as stocks came lower into a pullback. SP500 seems to be trapped within ongoing consolidation, ideally a triangle, so market may still see more upside after A-B-C-D-E subwaves, but ideally after the US elections. But in the mean-time we have to be aware of any potential dips due to coronavirus lockdowns that seem to be spreading very fast in Europe. However, business and investors can be prepared much better this time compared to March, so any new dip can be temporary

For more detailed analysis on SP500 and the USD Index, please check our video below.

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GBPAUD moving higher, searching for resistance after dovish RBA. But BREXIT is a bigger issue , not to mention coronavirus cases. So is this only a temporary rise on GBPAUD?

GH
 


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