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Elliott Wave Analysis: Higher Degree Complex Correction on EURUSD

On EURUSD we see the price trapped in a big consolidation pattern, a triangle that seems to be over as of the recent bearish price movement. It’s a five wave correction, a continuation pattern that can, after its completion, push the price lower into a strong decline. At the moment we see the price trading beneath the lower red trendline, suggesting that the final wave E is finished and now more weakness may come in play. If that is the case then lower levels will follow and sometime this week a decisive break beneath the wave swing D may happen, which will be the second confirmation theat the price action of the higher degree correction is being finished.

EURUSD, Daily

eurusd-d

Regarding the lower time frames, EURUSD fell beneath an important trendline support this month which indicates a completed EW triangle placed in a big black wave four. If that’s the case, then more weakness can be seen on EURUSD till the end of the year, especially if we consider that on the 4h chart decline is looking impulsively down to the 1.0850 area. It’s a five wave move that represents a bearish trend. However, nothing moves in straight lines so we need to be aware of a new corrective bounce, ideally in three waves back to 1.1038 resistance. But keep in mind that any pullbacks will be only temporary and short-lived patterns.

EURUSD, 4H

eurusd-4-1

Triangles are overlapping five wave affairs that subdivide into 3-3-3-3-3. They appear to reflect a balance of forces, causing a sideways movement that is usually associated with decreasing volume and volatility.

Basic Triangle Correction:

triangle-3

Gregor Horvat

Gregor Horvat

Grega Horvat Grega is based in Slovenia and has been involved in markets since 2003. He is the owner of Ew-Forecast, 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 Ew-forecast 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!