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

Grega Horvat Grega is based in Slovenia and has been involved in markets since 2003. He is the owner of www.ew-forecast.com, but before that he was working for Capital Forex Group and TheLFB.com. His feature articles have been published on FXstreet.com, Thestreet.com, Action forex, Forex TV, Istockanalyst, ForexFactory, Fxtraders.eu, Insidefutures.com, etc. He recently won the award on FXStreet.com for Best Forex Analysis in 2016. At www.ew-forecast.com he helps clients and educates them about the Elliott wave principle and how to label and track unfolding patterns in real time. His approach to the markets is mainly technical. He uses a lot of different methods when analyzing the markets such as candlestick patterns, MA, technical indicators etc. His specialty, however, is Elliott Wave Theory which could be very helpful especially if you know how to use it in combination with other tools/indicators. EW-Forecast To be involved in the market effectively, you need the right guidance and resources, and our team can help you to achieve that. Our team is providing advanced informations about Elliott Wave theory in real time. The Elliott Wave Principle gives you a method for identifying the behavior of the markets and at what points the market is most likely to turn. We help new traders who are interested in Elliott Wave theory to understand it correctly. We are doing our best to explain our views as simple as possible with educational goal, because knowledge itself is power!

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