- GBP/USD and AUD/USD have exceeded earlier confirmation levels, but their charts now allow pullbacks.
- EUR/USD retains a recovery projection above 1.11129, while USD/JPY favours another downward leg.
- USD/CAD’s revised count replaces the earlier bullish interpretation with a decline from 1.42999.
Market News
UK Inflation Strengthens the Rate-Hike Debate
UK September CPI rose 3.5% year on year, above the 3.4% forecast and August’s 3.1%, Reuters reported on October 21. Sterling gained as the release strengthened expectations of a November Bank of England hike. A hike remains an expectation, not an announced decision.
Australia and Japan Deliver Different Policy Signals
Reuters reported Australian-dollar gains after RBA Deputy Governor Andrew Hauser warned of a worsening inflation outlook. BOJ Deputy Governor Ryozo Himino also signalled room for higher borrowing costs. French fiscal concerns continued to pressure the euro, while traders awaited next week’s Fed meeting.
Japan’s September exports rose 16.7% against a 20.1% forecast; its ¥536.6 billion trade deficit exceeded the expected ¥181 billion, according to Reuters. That weaker trade surprise complicates the yen backdrop rather than confirming a single currency direction.
Elliott Wave Analysis
AUD/USD: Confirmation Achieved, With B Still Projected
The October 21 four-hour chart shows 0.70319 at 13:29:14 New York. Wave 5 ends at 0.68941, also labelled i on another degree. The subsequent advance is marked A near the latest 0.7035–0.7040 high.
Since October 19, price has cleared the 0.70149 confirmation level, strengthening the completed-low interpretation. The chart now projects B toward approximately 0.6970, followed by recovery toward 0.7030–0.7040. The highlighted 0.6985–0.6990 shelf is an intermediate reference.
A break above the A high would challenge the immediate pullback path. Losing 0.68941 invalidates the assumed completed-low recovery; the chart does not yet show B’s internal pattern.
EUR/USD: Recovery Scenario Survives Consolidation
EUR/USD reads 1.12352 at 13:28:39 New York. The five-part ending diagonal, (i)–(ii)–(iii)–(iv)–(v), remains complete at the explicitly marked 1.11129 invalidation boundary.
Price is above October 19’s 1.12085 reference, but has not confirmed the projected upside extension. The path allows a dip toward roughly 1.1210–1.1215 before recovery toward 1.1350.
Clearing the recent 1.1260–1.1270 area would strengthen that advance. Losing 1.11129 invalidates the completed-bottom interpretation and leaves a continuing larger decline as the alternative.
GBP/USD: The Earlier Target Has Been Exceeded
At 13:28:34 New York, GBP/USD stands at 1.33991. The rebound from 1.31372 now carries (a)–(b)–(c) labels within larger wave iv, following completion of wave iii.
Price has exceeded both 1.33718 and the earlier 1.3380–1.3390 target zone. However, the deep 61.8% retracement toward 1.3227 projected on October 19 did not occur; the correction was shallower.
The updated path allows (c) to extend toward approximately 1.3420 before a retreat toward 1.3330. A break below the (b) low around 1.3290–1.3300 would strengthen the reversal case. Further highs would extend iv rather than automatically invalidate the broader count; its definitive upper boundary is outside this chart.
USD/CAD: Revised Count Favours Bearish Continuation
USD/CAD trades at 1.40544 at 13:27:51 New York. The revised structure places an expanding (a)–(b)–(c)–(d)–(e) triangle in wave iv, followed by v completing larger A at 1.42999.
The earlier bullish outlook is no longer the working interpretation: the projected fifth-wave high has formed, followed by a substantial decline. The blue path now allows a bounce toward approximately 1.4120 before weakness toward 1.4080.
The recent 1.4030–1.4050 area is estimated support. Its loss would favour an earlier extension lower; sustained recovery above 1.4120 would weaken the immediate rejection path. Exceeding 1.42999 invalidates the assumed completed-A decline.
USD/JPY: A–B Recovery Leaves C Downside Open
USD/JPY reads 158.089 at 13:27:20 New York. X ended at 158.950 after C formed a five-part ending diagonal. The following decline is labelled A, with B recovering to 158.604.
The new path favours a C decline toward approximately 156.9, extending below October 16’s initial downside projection. Breaking the A low near 157.5 would strengthen continuation, while 156.377 remains a lower historical reference.
Recovery above 158.604 challenges the assumption that B has finished. A move beyond 158.950 invalidates X’s proposed completion; 159.038 is the earlier marked high.
Market Outlook
The key distinction is between completed advances and confirmed reversals. Sterling and the Aussie need evidence of pullback development; the euro needs an upside breakout; USD/CAD and USD/JPY require bearish follow-through. Watch the next Fed decision and domestic policy signals alongside price confirmation, rather than treating any projected arrow as a certainty.
