The recent advance uptrend I have labelled as a possible wave (i). The current retracement wherever it may end I am labeling as a wave (ii). Wave 2's can retrace wave 1's 100%. So it is possible that the wave (ii) may extend down even further. Just be aware of that. Many times, when coming from a major low/high point, a wave 2 retrace will retest that low/high point origination of the wave 1. Usually into the G-Zone reversal area. In cases like that, a popular reversal point ending for the wave 2 is usually between the .786 -.886 retrace of the wave 1.
So in this case, I have drawn in 3 POTENTIAL patterns that can mark the end of the wave (ii) retrace:
1,. Bat #1 (blue) - this bat completes near the .618 retrace and also has the completion of an pattern there as well.
2. Bat #2 (purple) - this bat completes pretty much right at the .886 retrace
3. (green) - this completes just beyond the .886 retrace
I'm not really favoring one over the other. This is where sometimes the use of the does come into play. And why you see in every chart I post that the is on it. I don't rely on the for much at all but this is one of those instances where it may come in handy. When prices reach each pattern, just check the to see if it is near to or at oversold condition. If so, then that pattern may mark a turn.
Also, be aware that the actual wave (b) point may not be set and can still be located higher. If so, then the patterns will need to be redrawn. However, should prices rise beyond where I have marked the end of wave (i), then it's possible that wave ( iii ) has already begun or my wave count is wrong.
The good news about this possible wave count is that if it is correct, then the end of wave (ii) will mark the beginning of a wave ( iii ).
MY TRADE PLAN
I'm LONG on this pair right now and in for the long term. Probably will only PAUSE my trade for the NFP later today but otherwise, I'm staying LONG. Right now, I'm only looking for the end of this retracement to maybe add to my LONG positions. I'm not playing any SHORTS here. But taking profit off that completed may be a wise move and then adding it back after the retracement is complete would also be good for anyone less risk adverse. For me,staying LONG is well within my trading plan.
Please keep in mind that I am not giving any trading signals or trade calls here. Only providing my own trade thoughts for your benefit and insight as to my trading technique and style. Please don't ask if you should or should not take the trade or ask for stop loss and take profit levels. Any SL or TP given on my trades are my own I have used for my trade and are not recommendations for you to use. If you are not sure, then you do not have a trading plan for yourself in place. I suggest you make one before you continue to do any trading!
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