Elliott Wave Analysis: EURUSD Trading In A Triangle, Temporary Bearish Run Is In Play
EURUSD is trading lower for the last few weeks, away from 78.6% Fibonacci level after that broken channel support line connected from wave X). In fact, fall is quite sharp so we are confident that it belongs to a bigger decline; thus a three wave drop down in wave D circled that is part of a big triangle placed in wave IV.
EURUSD, Daily
On the lower time frames, EURUSD is trading nicely lower for the last few weeks and it has now shape of an impulsive decline underway if we consider sharp fall last week to 1.1200 area which was our minimum downside objective. But decline looks strong from the last few weeks, so maybe it was black wave 3 and that is why we will expect more downside after current corrective bounce in wave 4 is finished. We believe a drop down to 1.1000 area could be possible as part of wave A of D within a triangle.
As of recent sharp downside price action, price could already be making last wave 5.
EURUSD, 4H
A Triangle is a common 5 wave pattern labeled A-B-C-D-E that moves counter-trend and is corrective in nature. Triangles move within two channel lines drawn from waves A to C, and from waves B to D. Triangles are overlapping five wave affairs that subdivide into 3-3-3-3-3.
A Triangle corrective pattern:
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