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THIS WEEK FOCUS

At the start of the week, we posted a blog analysis on the “A Roller Coaster Week“. Indeed it was a roller coaster ride. We mentioned in the previous post about the 4 major central banks meeting and monetary policy decision this week. And “trading the market during such volatile week isn’t exactly the safest way to approach the market, but it is during these events that we get huge opportunities and movement in the market – if we know how to handle the risk and engage the market properly.

With the understanding and application of Elliott Wave Analysis, our traders were able to ‘predict’ with high accuracy and confidence how these major risk events will play out.

US Dollar Index (DXY)

Based on the analysis on 12th March, and also in the previous post, we mentioned that –

“The current move since the start of February 2017 has been very corrective in nature, and we remain cautious of longing the Dollar. Based on one of the wave principles, after the completion of the corrective move, 80% to 90% of the time, we will see an impulsive move in the opposite direction.

We will not be a surprise if we see the Dollar selling off post FOMC this Wednesday. Looking at the daily timeframe on the DXY, the fall in Dollar might extend towards the 96.59 – 97.67 area.”

And indeed, we saw the Dollar sold off around 100 points during and post FOMC this Thursday.

12th March Analysis

17th March Analysis

GBPUSD

Another key risk event this week was BOE Monetary Policy Summary. Based on the 12th March analysis on GBPUSD, price is showing a potential triangle structure forming; and more importantly price has hit the minimum target for a 3-wave structure down on the 4-hour time frame. According to one of the principles in Elliott Wave Theory, the internal structure of a triangle is in waves of threes. And thus, we are expecting price of the UK Pound to move higher this week.

Since then price has rallied close to 200 pips.

12th March Analysis

17th March Analysis

USDJPY

Another key risk event was the BOJ Policy Rate and Press Conference. Usually the risk events from Japan is either a muted one, or a very volatile one. This month’s event was rather quiet, but our traders’ managed to ride on the weakness on the US Dollar from FOMC couple of hours before the BOJ’s event.

While the labelling of Elliott Wave can be very subjective and confusing, our traders were taught how to objectify Elliott Wave Analysis by having a count sequence. Even when the labelling is different, the forecasted direction is the same.

Since then price has fallen more than 100 pips.

Analysis done by one of our Elliott Wave traders.

12th March Analysis

17th March Analysis

USDCAD

Riding on the sell off on US Dollar, another good trade was on USDCAD. On 12th March, we saw a potential expanding flat structure close to completing, and price was within the completion area of the flat structure. Thus we are expecting price to move lower this week.

This setup is an example of trading the correlations and confluences in the market. We saw a high possibility of a weakening DXY, and we are seeing a potential completed structure on the USDCAD. This gave us the confidence in shorting the USDCAD pair.

Since then, it has fallen more than 100 pips.

12th March Analysis

17th March Analysis

USDCHF

Another pair that we managed to catch, and shared with fellow PAFTI traders from the Philippines was the USDCHF trade. It was a great sharing session with friends from the Philippines and would like to extend our appreciation to Jonathan and Alex from PAFTI for organising this event for us.

The recent up move in USDCHF was very ‘corrective’ in nature, which gave us the forecast that we might see a move lower once the correction is completed. And it was the FED FOMC that served as a catalyst to move price lower.

Price has since moved more than 100 pips lower.

12th March Analysis

17th March Analysis

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WHAT'S NEXT

Where will the US Dollar Index and these currency pairs be heading? Join us in our upcoming Elliott Wave Masterclass on the 22nd and 25th April to equip yourself with the understanding and knowledge in forecasting the market with accuracy and precision.

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A self-taught trader, Kar Yong was once featured in Channel News Asia’s Money Mind Young Investor. He was also featured as a Social Guru on the eToro social trading platform where he led the path for more than a thousand traders in confusing market conditions by sharing his trading strategies through forums and blog posts. Today, he teaches his proprietary 4 Pillar Forex Trading Strategy to students from all over the world.

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