Elliott wave Analysis: Triangle Correction on EURUSD Points Higher
On EURUSD we are looking at an Elliott wave triangle correction in the making within wave four. A triangle pattern is a five-wave overlapping movement, which usually unfolds prior to the final wave within a bigger trend. In our case we believe this wave will show up to the upside, but of course once wave four fully shows up. That said, now we see price unfolding wave d) of four which should be made by three waves up towards the upper side of a range, ideally to Fibonacci ratio of 61.8, which can offer resistance.
Now switchting to the intra-day chart, where we have a better look at the EURUSD structure. Specifically we think minor wave b of d) can be in progress, which can see support and turn higher at the 1.2320 region. On that note, once higher degree wave d) finds resistance, a new turn lower in three-waves may follow for the upcoming wave e) of four.
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. A Triangle is either contracting or expanding depending on whether the channel lines are converging or expanding. Triangles are overlapping five wave affairs that subdivide 3-3-3-3-3. Triangles can occur in wave 4, wave B, wave X position or in some very rare cases also in wave Y of a combination.
Elliott wave triangle:
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