Elliott Wave Analysis: EURUSD staying within a big triangle

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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, the 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

eurusd d (3)

On the lower time frame, EURUSD is trading nicely lower for the last few weeks and it has now the  shape of an impulsive decline underway, if we consider the sharp fall last week to 1.1200 area, which was our minimum downside objective. But the decline looks strong from the last few weeks, maybe it was the black wave 3. We will expect more downside after the current corrective bounce in wave 4 that may look for a resistance near 1.1260 early this week for a drop, then down to 1.1000 area as part of wave A of D within a triangle.

EURUSD, 4H

EURUSD 4 (6)

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 basic triangle pattern:

triangle 1

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About Author

Gregor Horvat is  based in Slovenia (Central Europe) and has been in Forex market since 2003. He is technical analyst and individual trader who also provide a lot of articles and trade plans based on the Fibonacci and Elliot Wave principle. He was working for Capital Forex Group and TheLFB.com. His feature articles have been published in: Thestreet.com, Action forex, Forex TV, Istockanalyst, ForexFactory, Fxtraders.eu. He mostly focuses on currencies, oil, gold, and the U.S. stock market. Gregor Horvat is also founder of forex services on www.ew-forecast.com. EW-Forecast.com provides technical analysis of the financial markets, highlighting behavioral patterns based on the Elliott Wave Principle (EWP). EWP provides a method for identifying price points at which a market is most likely to turn. Knowing the probable swing and reversal points provides confirmation of where investors could enter and exit positions for the highest probability of success. Gregor Horvat Chief  Technical Strategist Website:  For more analysis visit our website and Try our services absolutely free for 7-days! http://www.ew-forecast.com/service//

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