Monthly Wave Analysis for October, 2012 (EUR/USD, GBP/USD, USD/CHF, USD/JPY)

Analysis for October, 2012

EUR/USD

It is known that Euro was adopted in 1999, and all synthetic data prior to that year presented by different providers may differ significantly. That’s why a global chart of the EUR/USD currency pair looks like a mirror image of that of Swiss Franc. Taking this into account, we may assume that currently the pair is forming a large ascending double zigzag, [W]-[X]-[Y] of z.



We can’t exclude a possibility that the price may have already finished a descending triple zigzag, W-X-Y-X-Z of (Z) of [X], and a major correction [X] in the form of triple three, although it’s yet to be confirmed. If it’s true, we can expect the pair to continue forming an ascending wave [Y] in the form of a large (double) zigzag (A)-(B)-(C) of [Y].



One of the possible scenarios (but not the only one!) can be seen on the figure below. We may assume that the price has completed a descending triple zigzag, W-X-Y-X-Z of (Z) of [X], and a new ascending trend has started. If the assumption is correct, it’s quite logical to expect the pair to continue moving upwards inside a possible zigzag [Y].

GBP/USD

A global chart of Pound indicates that there are several possible scenarios. Over the last 20 years the price has been forming divergent horizontal triangle [X] of x, a final wave of which, (E) of [X] of x, probably hasn’t been completed yet.



We may assume that wave (E) is taking the form of zigzag, A-B-C of (E) of [X]. If the assumption is correct, the pair will continue moving upwards without breaking the closest critical level and may complete a possible correction, B of (E) near 1.7 or a bit higher, where there is a strong resistance level.



One of the possible scenarios implies that a correction [b] of B has been finished in the form of diagonal triangle (c) of [b]. At the moment Pound is forming an ascending wave [c] of B. In this case it’s quite logical to an ascending trend to continue.

USD/CHF

At the monthly chart of Franc we can see that over the last 40 years Swiss Franc has been forming a global descending structure, which may be identified as triple zigzag. If the assumption is correct, then we can expect the long-term ascending trend after the price finishes forming such a pattern.



We can’t exclude a possibility that a final wave [C] is taking the form of a large descending diagonal triangle. The price may have completed a correction (4) of [C]. In this case it’s quite logical to expect to move downwards and form a final zigzag (5) of [C]. At the same time, one should take into account that currency interventions on the part of Swiss National Bank may change chart structure a lot.



One of the possible scenarios implies that the price is currently forming a descending zigzag A-B-C of (5). If it’s true, we can expect a descending trend to continue.

USD/JPY

The structure of a global chart of the USD/JPY currency pair implies that the price is finishing (or may have already finished) a major descending trend in the form of a possible impulse (or double zigzag). If the assumption is correct, we can expect this major trend to reverse upwards and start forming, at least, a global ascending correction.



One of the possible scenarios implies that a final wave V is taking the form of diagonal triangle, in which wave [3] is shorter than wave [1]. It means that the critical level is about 60 and the price mustn’t break it before completing the triangle.



We may assume that the price is completing quite a long correction [4] of V with skewed triangle (E) of [4] of V, after which it’s quite logical to expect the pair to move downwards and form a final wave [5] of V.