schakim

Perfect short... but not just yet

Short
FX:EURGBP   Euro / British Pound
182 views
8
Ending diagonal , divergence, perfect conditions for a short but from what I see we will have one more high at about .92 before fall kick in, so .9190 is where I will cover my current longs and add shorts with a SL just above the higher high to the left.
Comment: Regarding the "higher high to the left" (on 2016-10-07 btw) for SL, I have seen many different prices depending on feed like FXMC has it at .92253 while OANDA states .91496 only, but I have seen .96118 in a chart although don't know the feed of it.
Comment: A somewhat updated wave count to reflect that the wedge is still alive and kicking as the reality of the crappy UK data slowly works its way into traders consciousness, should take this pair up to somewhere between .9180 and .9220 as I see it now.
Comment: Soon no more sellers left, that's when it will do the for an Ending Diagonal the typical "trow over" shooting up to take stops and lure in buyers, before it plunges. Patience is the game...
Comment: Everyone and all interest is focused on the rising wedge and just see sell sell, and may be blind for the fact that we are trading in the middle of a rising channel that may stretch much higher than .92 before we are ready to break to the downside for real.
Comment: A small triangle in the making, that may shoot price up a bit, but I don't think that will be the final leg to complete the wedge, not just yet...
Comment: I start to come of the opinion, no, I am now of the opinion that this wedge has come to survive itself and wont play out, too much hype, too many shorts piling up for too long, building a rocket launch pad for the Euro. So this is what I see now, several posibilities. It trades in one of 2 possible channels but which one will it respect? I don't know, time and PA will tell.
Comment: Small update, this is what I see right now. Expecting one more high before a bigger correction to the downside.
Comment: Of course, triangle can break out in the other direction as well ...
Comment: Weekly, long term perspective. I don't know how high we will go, to parity or not, but I'm pretty confident we will go higher still. In my view we just completed Intermediate wave 3 of an extended Primary wave 5 of Cyclic wave V
Comment: On the Daily chart it's worth notice that we don't really have any H&S pattern as shown on smaller time frames, but that we closed pretty much right one a long term trend line dating back to the 2008 all times high and the 2016 high. It didn't give much resistance on the way up but that isn't in any way an indication of weak support.

As we can see 5 waves down on smaller time frame (where the 5th may still have a few pips to give or take) I would expect support to hold at least the first assault and that we will see a 3 waves rally up next week to test neckline of smaller time frame H&S pattern. Then comes Thursday and we will probably have decision time to continue up right away or correct deeper down to the main channel's lower boundary.
Comment: Elliott Wave isn't precisely an exact science/tech and while structures to count sometimes can be very clear, more often they are not and counting may be somewhat arbitrary and/or there may be more than one possible count. Surprisingly though, the end result often turns out to be more or less the same, at least for a while along the path...

As seen on the 1H chart for the last move down, it can be counted as 5 waves down (although the 5th may be incomplete) which at the same time gives a wave A on higher degree, in which case we now can expect a 3 waves move in the other direction.

Likewise, it can also be counted as an A-B-C structure, which also can equal wave A on higher degree, but technically it can also mean that Primary wave (4) is completed, but in all cases it would mean at least 3 waves in the other direction. However, having said that, this may also turn out to be just an extension in a bigger structure still to unfold and this all is Price Action in its true sense - we can never know for sure until it actually happens, we can just calculate probabilities.

Comments

Of course, triangle can break out in the other direction as well...
Reply
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