EURUSD down before up?

In our last analysis we were expecting an upside move in EURUSD and the pair really did rise, but the rally was limited to only three waves, suggesting that we are still in some kind of a corrective pattern. Below you can see an updated chart with a little relabeling. The corrective pattern, that started from the top at 1.3906 still looks like a zig-zag retracement, but this time we are considering a triangle in wave (b) of “B”.

eurusd 25.4.14.

Triangles precede the final move of the sequence. If this is the correct count, we should now expect a decline to the 1.3760 zone in wave (c) of “B”. However, on the 1-hour chart of EURUSD we are still bullish, so once that 61.8% Fibonacci level is reached, the uptrend should be restarted with 1.40 being the next target. Of course, Fibonacci levels can be used only as guidelines, not firm rules. This means that the wave (c) decline could extend lower than 1.3760, but prices have to stay above 1.3670, because that is where our invalidation level is. In other words, this is the place where the protective stop should be, if we decide to go long after the end of “(c)”. On the other hand, if wave “e” moves above wave “c” of the triangle, we will immediately return to our previous count without having missed much of the move. That is why each trade has to be closely observed and alternative counts considered.

New to Elliott Wave?

Elliott Wave principle offers a completely new understanding of what the nature of the markets is, what drives them and what can be derived from their movement. This course is for those of you, who have been looking for an honest Elliott Wave guide, describing the method’s advantages over other trading tools, but not hiding its weaknesses.

Check Video Course    or     Check our eBook


See our Video Course
or check our eBook

Last year over 60k readers trusted EWM Interactive to help them in their trading decisions.

I’m very happy i discovered your service. Thanks so much and keep up the good work!

- Xavier N.

Just loving your analysis. Thank you so much, really wished you add some more currencies to your list You have a client for life :)

- J. Kotzee

I love the way EWM does business: response times & overall friendly demeanor are fantastic... and the prices are very fair. The trade recommendations read like like they come from a seasoned trader that is used to winning. Couldn't ask for more.

- C. Montgomery

I love the way EWM does business: response times & overall friendly demeanor are fantastic... and the prices are very fair. The trade recommendations read like like they come from a seasoned trader that is used to winning. Couldn't ask for more.

- C. Montgomery

I’m very happy i discovered your service. Thanks so much and keep up the good work!

- C. Montgomery

Just loving your analysis. Thank you so much, really wished you add some more currencies to your list You have a client for life :)

- C. Montgomery