EURUSD still on schedule for a crash

Bulls are getting more and more excited about EURUSD as it is getting closer to the 1.40 mark. But if we want to draw a line between financial decisions and emotions we need to look at the charts, because they show what is really going on in any market. For the purpose of analysis we will start from the big picture on the weekly chart of EURUSD and then walk through daily, 4-hour and 1-hour charts.

eurusd big pic

And the weekly chart suggests for a triangle in wave “X circled” that is near its completion. Triangles are continuation patterns signaling for one last move in the direction of the larger trend. In our case that last move should be wave “Y circled”, which is normally expected to form a bottom in the 1.10 zone. In order to determine what is left of wave (E) of the triangle, we have to get a closer look on the daily chart of EURUSD.

eurusd daily

On the daily chart we see some very “slow and choppy” price action – a hint for an exhausted trend. However, there is still some room for EURUSD to rise and maybe reach above 1.40, but not much higher, especially if our idea of an ending diagonal comes true. Of course, at this stage it is only an idea, but let’s see the internal wave structure of EURUSD from the beginning of 2014.

eurusd 4h

2014 did not begin well for EURUSD, but the pair managed to find support in early February and rose to a new high in the middle of March. But as you can see, that rally was limited to only three waves a-b-c in red. Why are we labeling it “1” when it is not impulsive? Because each wave of the ending diagonal has only 3 sub-waves, not 5. Furthermore, as shown below, the decline from 1.3965 to 1.3704 is also corrective.

eurusd 1h

It is a double zig-zag W-X-Y, so more strength has to be expected. In conclusion, we are bullish in the short term, but extremely bearish in the long one. If this is the correct count, EURUSD should be near a major reversal point and we still think that 2014 could be a very bad year for the European currency.

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