- EUR/USD and GBP/USD show recovery structures, while AUD/USD retains a bearish fifth-wave projection.
- USD/JPY points lower after an ending diagonal; USD/CAD anticipates a rebound from wave IV.
- US import-price inflation and contrasting domestic developments complicate the dollar’s direction.
Market News
US Inflation Meets Softer Dollar Momentum
US September import prices rose 1.1%, exceeding the 0.8% forecast, after August’s increase was revised to 0.5% from 0.7%. Reuters reported the release on October 16. The surprise keeps inflation relevant to the Federal Reserve outlook; it does not independently confirm a dollar reversal.
Earlier on Friday, Reuters reported that falling Treasury yields and reassessment of US rates had left the dollar heading for weekly losses against the euro and yen. Bank of Japan Governor Kazuo Ueda also reiterated inflation risks.
Domestic Signals Diverge
Australia’s October 15 employment release showed 39,300 fewer jobs in September, following a revised 29,300 increase in August. Unemployment was 4.7%. Reuters reported reduced rate-hike expectations after the figures, providing context for Australian-dollar vulnerability.
Sterling reached a three-week dollar high on October 16, according to Reuters, following better-than-expected August economic growth. In Canada, Reuters reported Governor Tiff Macklem’s warning that persistent energy-price pressure could complicate interest-rate decisions. These developments leave each pair exposed to distinct policy risks.
Elliott Wave Analysis
AUD/USD: Fifth-Wave Downside Remains Favoured
The four-hour chart shows 0.69562 at 09:30:12 New York on October 16. Wave iv ends at 0.70149 after a five-part diagonal-shaped advance, labelled (1)–(5). Its breakdown favours wave v lower.
The 0.6985–0.6990 highlighted area is approximate overhead resistance. A break beneath 0.69037 would strengthen the continuation case toward roughly 0.6880. Recovery above 0.70149 would invalidate the assumption that iv has finished and v is underway.
EUR/USD: Recovery After a Terminal Decline
At 09:30:17, EUR/USD reads 1.12430. The red boundaries frame a completed five-leg ending diagonal, with (v) ending the larger wave v. Price has recovered above the upper boundary.
The projected pullback approaches 1.1215–1.1220 before an advance toward approximately 1.1350. Clearing the recent 1.1260–1.1270 area would support continuation. The chart explicitly marks 1.11129 as invalidation; a break below it rejects the completed-low interpretation.
GBP/USD: Triangle Gives Way to Wave IV Recovery
GBP/USD stands at 1.33355 at 09:30:51. The a–b–c–d–e triangle forms wave (iv), followed by a final (v) decline to 1.31372, completing the larger wave iii.
The subsequent advance has exceeded the marked 1.33110 high. The path allows a pullback toward approximately 1.3300 before wave iv extends toward 1.3380–1.3390. A return beneath 1.33110 would weaken immediate momentum; losing 1.31372 would negate the completed-bottom recovery scenario.
USD/CAD: Wave IV Completion Under Examination
At 09:30:56, USD/CAD trades at 1.41661. The chart labels an expanding a–b–c–d–e triangle as the larger wave iv, following wave iii at 1.42938.
The projected rebound first needs to reclaim approximately 1.4200, then challenge highlighted resistance around 1.4285 and the 1.42938 high. The arrow extends toward 1.4300–1.4310. A fresh low beneath the apparent e endpoint, around 1.4145, would undermine the immediate completion assumption; that low is estimated, not printed.
USD/JPY: Ending Diagonal Caps Wave X
USD/JPY reads 158.035 at 09:31:03. After W ended at 156.377, an A–B–C recovery culminated in a five-part ending diagonal within C, completing X near 158.9.
The blue path permits a rebound toward roughly 158.4 before renewed weakness toward 157.25. Breaking the recent 157.6 area would strengthen that path. Exceeding the X peak would challenge its completion; 159.038 is the earlier marked high.
Market Outlook
These charts favour selective, pair-specific scenarios. Further dollar weakness would fit the euro and sterling recoveries but challenge the projected USD/CAD rebound. Conversely, renewed dollar strength would test EUR/USD support. Approximate arrow destinations are scenario guides, while the explicitly marked EUR/USD invalidation provides the clearest fixed boundary.
