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Figure 1. Wave counting on 480 min chart of EUR/JPY.
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The ending of the third wave 3 has overcome the edge of the projected area by 50 points, showing its bullish power (see Never-ending Ascension of EUR/JPY). But in the long run the trend reversed downwards and downtrend formed a completed and quite a proportional zigzag [a]-[b]-[c].
It is not confirmed yet that this zigzag has completed, though we may suppose it judging by its right proportions. Unfortunately, it is not clear yet whether its ending is the extremum of wave 4 or it is just its first main wave [a] of 4 (see the next chart).
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Figure 2. Wave counting on the daily chart of EUR/JPY.
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I am sure that the minimum requirements for the fourth impulse waves have been fulfilled:
- completed downward corrective pattern, zigzag [a] or 4, has been formed;
- retracement of 26% depth (fibo) has been formed, it alternates with the second wave 2 by the depth (66%);
- the price has reached the lower edge of the trend channel of global impulse (5);
- MACD 5-34-5 has been in the negative area for a long time.
Thus, the ending of the downward zigzag may be the extremum of the fourth wave 4. At the same time it may be just the beginning of the extended horizontal correction [a] of 4.
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Figure 3. Wave counting on the weekly chart of EUR/JPY.
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The fact that RSI approaches its resistance level may serve as an additional argument in favor of uptrend soonest beginning.
If the supposition is correct we can specify the projected area of completion of the final wave 5 of the global impulse (5) for the weekly time-frame, red-yellow ellipse in the picture. Otherwise, I will have to recalculate the projected area for this time-frame once wave 4 completion is confirmed. The upper edge of the projected area, calculated on the basis of the waves in the monthly chart, is given in grey in this chart (see the next picture).
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Figure 4. Wave counting on the monthly chart of EUR/JPY.
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The projected area of the uptrend completion for this time-frame remains unchanged.
2. GBP/JPY.
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Figure 5. Wave counting on 720 min chart of GBP/JPY.
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On the whole, GBP/JPY movement is equal to the one of EUR/JPY. The ending of the third wave [iii] has overcome the edge of the projected area by 25 points showing its bullish power (see Nearest Projections of GBP/JPY). Though just like in case of EUR/JPY the trend reversed downwards and then a completed and quite a proportional downward zigzag (a)-(b)-(c) formed.
It is not confirmed yet that this zigzag has completed, though we may suppose it judging by its right proportions. Unfortunately, it is not clear yet whether its ending is the extremum of the fourth wave [iv] or it is just its first main wave (a) of [iv] (see the next chart).
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Figure 6. Wave counting on the daily chart of GBP/JPY.
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It should be noted here that the minimum requirements for the fourth impulse waves have been fulfilled:
- completed downward corrective pattern, zigzag (a) or [iv], has been formed;
- retracement of 28% depth (fibo) has been formed;
- the price has almost reached the lower edge of the trend channel of global impulse C;
- MACD 5-34-5 has been in the negative area for a long time.
Thus, the ending of the downward zigzag may be the extremum of the fourth wave [iv]. At the same time it may be just the beginning of the extended horizontal correction (a) of [iv].
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Figure 7. Wave counting on the weekly chart of GBP/JPY.
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The fact that RSI approaches its resistance level may serve as an additional argument in favor of uptrend soonest beginning.
If the supposition is correct we can specify the projected area of completion of the final wave [v] of the global impulse C of (Y) for the weekly time-frame, red-yellow ellipse in the picture. Otherwise, I will have to recalculate the projected area for this time-frame once wave [iv] completion is confirmed. The upper edge of the projected area, calculated on the monthly chart, is given in grey in this chart (see the next picture).
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Figure 8. Wave counting on the monthly chart of GBP/JPY.
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In this time-frame everything remains the same.
Addition (August 16, 2007
Unfortunately, suppositions that the downward zigzag for EUR/JPY and GBP/JPY may remain incomplete, were confirmed. Supposed (and probable) ending of the zigzag turned out to be just th first wave of the final impulse of this zigzag. Now we should wait for the downward correction completion to be confirmed. Adjusted wave counting markings are given below.
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Figure 9. Wave counting on 480 min chart of EUR/JPY.
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Figure 10. Wave counting on 720 min chart of GBP/JPY.
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Note
Given possible trading plans are purely informational purpose only and they should not be considered as trading guides or an invitation to make a transaction.
Reference:
Dmitry Voznuy
forDmitry@yahoo.com
August 12, 2007
When using any part of the article for publication or analytical materials reference to the author and Alpari is obligatory.
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