We have major news coming out later this morning and tomorrow that could dramatically effect EUR/USD. This post is made in advance of the news to establish a plan prior to emotions running high during the potentially volatile events.
The Elliott Wave count appears mature to the down side. The sloppy and overlapping continuation lower over the past 2 weeks suggests we may be in an ending diagonal pattern. If correct, look for prices to run up to the origination of the pattern near 1.0830.
As labeled on the chart, 1.0430 is a key level. That is where blue iii would be the shortest of blue i, iii, v. That would break Elliott's rules so that can be used to establish risk or perhaps implement a stop and reverse.
On Balance volume has also been lagging dramatically. The volume in this downside move has not been robust.
Sentiment is currently near +1.24. If during the ECB announcement today or NFP announcement tomorrow, if the real time sentiment reading drops, that may suggest the bulls have an advantage (because SSI is a contrarian indicator).
Bottom line, this pair is ripe to bounce to the 1.08-1.09 handle. Above 1.1090 suggests a much large trend higher is ensuing. Bears can sharpen their claws int he 1.08-1.10 zone. 1.0430 is key to this view.
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very good catch buddy. I am already focusing more and more on Euro and dumping USD. I guess USD has run it's course and not much juice left in it (refer to my weekly analysis on USDCAD pair). Oil is also a definate interest area on the bull side. Portfolio managers shall increase EURO and OIL holdings IMO.
JWagnerFXTrader
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FWIW - the number of traders short EURUSD has grown 17% over the past 24 hrs - a large move and a bullish indication
Berny
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Thanks a lot, thanks to your analyis I went long at 1.548 and made the trade of my life. Thanks again. I follow you now.
JWagnerFXTrader
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LDHF on the trade Berny! (Long Distance High Five)
Berny, entries and exits are only a portion of a trading plan. Risk management is perhaps more critical. It is possible that traders can win 60% of trades with a 1:1 risk to reward ratio and still lose in their account...it is due to risk management. Download this guide if you haven't seen it already. Thx
Glorios analysis, as EUR/USD reached 1.09 level, would it pullback again ?
JWagnerFXTrader
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Hi Khibrattor - tough one right now...NFP is coming tomorrow.
The simplest answer is if EURUSD hits 1.1090, that seals up the Aug 24-Dec 3 down trend as a 3 wave affair and odds shift heavily towards a retest of 1.17.
Between now and 1.1090, it's tricky. Could retest the 1.05 lows, but the Bear's line in the sand is 1.1090.
EL_KHIBRATTOR
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thank you so much
Kadhijah
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beautiful.. great thought.
thanks for willing to share
JWagnerFXTrader
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Hi Tupai - Thank you for the kind words.
Divergence will typically take place in the 5th wave position or B wave of an expanded flat. Since the ending diagonal appears in the 5th wave position, RSI divergence can warn a trader of the turn even if they didn't identify the ending diagonal. The ending diagonal, as you see above, has overlapping waves which means momentum is still pushing it lower, but not in impulsive fashion. It warns of a turn. Couple that with major news between today and tomorrow and it is an elevated chance of a bounce.