EURUSD rose significantly from 1.3670 to 1.3905. This move fits perfectly in our big picture outlook, as wave “a” of wave 3 of an ending diagonal. On the chart below you can see how our idea of this pattern looks like right now in EURUSD.
As shown, wave 2 of the presumed ending diagonal bounced up exactly from the “Golden Ratio” level of 61.8% of wave 1. But after this bounce EURUSD traveled more than 230 pips to the upside, without a serious pull-back, so let’s look at the smaller time-frame and see if we should expect a correction soon.
And on the 30-minute chart we can count a complete five-wave impulse. After every impulse, a correction should follow. That is why we have to prepare for a short-term pull-back in EURUSD, instead of being impressed by its strength.
