Monday, January 5, 2015

EurUsd Next Move...Are You Ready?

As EurUsd continues to dip, we ask ourselves— HOW LONG OR FAR WILL IT CONTINUE DOWNWARD?.

On the long term, what we are currently seeing is probably the formation of the last internal wave of the Triangle corrective pattern which started after the completion of a 8 years long bullish impulsive move in 2008. 



This triangle, if held, would have taken 6 years to form. This shows that the prospective triangle is about 75% (between 61.8 and 78.6% Fibonacci retracement) in Amplitude (breadth of time) of the 8 years impulsive move. If the magnitude of the movement is also

taken into consideration, the Triangle is presently at the 50% retracement of the bullish impulsive move. Price is expected to turn back any time soon.

Since the second wave of an impulse is rarely a triangle formation, the whole move from year 2000 could be an “ABC” corrective pattern with the corrective triangle probably completing the “B”.

With confluence of supportive parameters at 1.1815-1.1750, and if price doesn’t turn from 1.2000, we could see a bounce off this region and price returning bullish for many years.

If the long term supportive trendline (in the chart) is broken downward in high momentum, we would have to reanalyze what price is trying to do. We can look for reversal signal at the support region mentioned above.

On the daily chart, there is a bearish impulsive move with the fifth wave about to complete. 

If we project the possible zone for the completion of wave 5, we will take note of 1.2000 which is a confluence of 61.8% extension of wave 1 to 3 from wave 4 and 200% extension of wave 1 from  4 ; 1.1815 which is the 261.8% extension of wave 1 from 4 and 1.1750 which is the 78.6% extension of wave 1 to 3 from 4.


With price presently at 1.200, a further dip will force us to watch out for bullish reversal signals at 1.1815-1.1750

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