In this video blog, we will take a look at USDSGD which is showing 5 swings down from 1/3/2017 (1.4545) peak. 5 swings is an incomplete Elliott Wave sequence and suggest bounces should fail in the sequence of 3-7-11 swings for more downside.
The decline from 1/3/2017 (1.4545) peak was a double three Elliott Wave Structure and completed a cycle degree wave “w” at 1.3346 on 9/8/2017. This was followed by a corrective bounce to 1.3714 (10/27/2017) to complete a cycle degree wave “x”. The pair has since dropped to new low below 1.3346 which makes it 5 swings down from 1.4545 peak and opens up more downside towards 1.2515 – 1.2233 area. 5th swing in a 7 swing (WXY) sequence usually ends in 0.618 – 0.764 Fibonacci extension area of the first three swings and this area comes between 1.2973 – 1.2798. This area can end a cycle from 10/27/2017 (1.3714) peak and produce a bounce in the pair which should unfold in 3-7-11 swings and as far as 1.3714 high holds during the bounce, the pair should then continue lower towards 1.2515 – 1.2233 area. Cycle from 1.3714 peak is mature and should ideally end before 5th of February 2018, another low may or may not happen and hence why chasing the short side here is risky but once cycle from 1.3714 peak is over, we do expect the bounces to find sellers in 3-7-11 swings. As the sequence is bearish we don’t like to buy into the proposed wave ((B)) bounce.