Elliott wave analysis: Triangle correction on EURUSD Points Higher

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The daily chart of EURUSD shows us a five-wave bullish impulse in the making within higher degree wave C). We see a choppy and slow price movement for the last three months as part of a pullback, that can unfold as a EW triangle correction. Wave 4 is usually more complex, then wave 2 and can take longer to fully develop, so gains can still be put on hold for awhile.

EURUSD, Daily

Regarding the 4h chart, where we see a recent decline to around 1.1712 level as leg c is the third leg of a EW triangle pattern. Here the former swing low of red sub-wave b) at 1.1713 level can offer support and push the price higher into leg d.

All being said, a breach above the 1.1960 level will indicate a completed EW triangle correction and more upside to follow, into leg 5.

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. A Triangle is either contracting or expanding depending on whether the channel lines are converging or expanding. Triangles are overlapping five wave affairs that subdivide 3-3-3-3-3.

Triangles can occur in wave 4, wave B, wave X position or in some very rare cases also in wave Y of a combination

EW triangle pattern:

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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 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!

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