RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Fri’s break below 05-Jul’s 1.2894 initial counter-trend low reaffirms the interim peak/correction count discussed in 05-Jul’s Technical Blog and leaves Thur’s 1.2984 high in its wake as the latest smaller-degree corrective high the market now needs to sustain losses below to maintain a more immediate bearish count.  Its failure to do so will render the sell-off attempt from 30-Jun’s 1.3031 high the 3-wave and thus corrective affair we subjectively believe it to be.  In this regard and just below 30-Jun’s 1.3031 high and short-term risk parameter, we believe Thur’s 1.2984 corrective high serves as an even tighter but important risk parameter that, if recouped, could re-expose not only late-Jun’s uptrend, but possibly all of 2017’s bull market to new highs above 1.3050.

The fact that the past week-and-a-half’s sell-off attempt has thus far retraced only a Fibonacci minimum 38.2% of late-Jun’s 1.2589 – 1.3031 rally would reinforce this bull market correction count if the market were able to recoup Thur’s 1.2984 high.  In lieu of such 1.2985+ strength however at least the intermediate-term trend remains down and could result in further and possibly steep losses.

British Pound 240min


The extent of late-Jun’s recovery is not unimpressive especially given a prospective 3-wave and thus corrective May-Jun decline from 1.3049 to 1.2589 that stalled at virtually the exact (1.2579) 50% retrace of Mar-May’s 1.2109 – 1.3049 rally that preceded it.  While the 1.3031-to-1.3049-area that defines the upper boundary of the past couple months’ range remains a considerable resistant cap, further intra-1.3050-to-1.2590-range consolidative wafting should hardly come as a surprise.  But 21-Jun’s 1.2589 low remains intact as the critical long-term risk parameter the bear is obligated to break to threaten or negate our long-term bullish count that calls for an eventual 1.3050+ upside breakout ahead of what we still believe will be a run at the 1.35-to-1.38-range.

British Pound Daily Chart

British Pound Weekly Chart

Traders are reminded this market is still coming off major base/reversal-threat conditions stemming from the unique combination of:

  • a confirmed bullish divergence in WEEKLY momentum amidst
  • historically bearish sentiment not seen since 2001 and
  • an arguably complete 5-wave Elliott sequence down from Jul’14’s 1.7192 high labeled in the monthly log scale chart below.

If we’re correct in our interpretation of these technical events, then a major correction or reversal is at hand with former 1.35-to-1.38-handle area support from 2009 until Jun’16’s breakdown the next key resistance candidate on a very long-term basis.

These issues considered, a cautious bullish policy remains advised for longer-term players with a failure below 1.2589 required to negate this call and warrant its cover.  A neutral-to-cautiously-bearish policy remains OK for short-term traders with a recovery above 1.2985 threatening this call enough to warrant moving to a neutral/sideline position ahead of then-increased odds of a breakout above 30-Jun’s key 1.3031 high that could then expose a resumption of 2017’s major uptrend and a run at the 1.35-to-1.38-range.

British Pound Monthly Chart

RJO Market Insights

RJO Market Insights specializes in forward-thinking analysis, focused on potential market-moving events and dominant factors driving price discovery. Detailed fundamental and technical coverage across multiple commodity sectors is combined with objectively-constructed trade recommendations to provide an industry-leading product for R.J. O’Brien’s Institutional clients, commercial hedgers, introducing brokers and individual investors free of charge. Content is distributed in both text and audio formats, with specialized service offerings provided by account type.
For more information on RJO Market Insights, contact your broker or RJO representative.