In this chart I want to share my view on the next EURUSD movements based on Elliott waves. The statements I would like to advocate:
1) We have almost completed the impulse wave from 1.3994 to 1.1098 are are now set for a flat correction for a few months.
2) The descent is _not_ finished and we will continue moving down for another ~2900 pips till end 2015.
The reasons that make me believe this scenario is valid are the following:
1) There have been three wave of USD vs EUR weakening since early 1970s. The present ticker contains the data of USD vs European currencies aggregate starting 1971 and the cycles are clearly visible. We can view those three cycles as a 5-wave bullish diagonal, which would require a noticeable correction after its completion. I believe the market is now drawing exactly this type of large correction which is certainly not finished.
2) I believe the latest bearish impulse wave of EURUSD started much earlier than June 2014. In fact, I regard the descent observed since May 2011 as an impulse wave of which we have almost completed wave . An observation that hints this wave count may be valid is the stunning equality of waves and , as show on the chart. The equality of waves suggests they are part of one logical structure. Projecting the development of wave and onto the possible wave and taking into account the magnitude of movement needed to obtain a sizable correction in EURUSD after three cycles of USD weakening, I aim for == equality.
3) "Naive fibonnachi" extension (2.618 from earlier trend breakout to the top of wave also suggests we should land in approx. 0.87 area.
4) Technical analysis set aside, there are ongoing issues with the economy and the search for safe haven is far from completion. S&P is making ATHs, we have yet to observe its fast decline at some point, which I believe will coincide with another wave of USD strengthening. I assume the timing of S&P reaching its top will be May-June 2015, so the start of wave of EURUSD descent aligned to the same timeframe would make sense.
1) We have almost completed the impulse wave from 1.3994 to 1.1098 are are now set for a flat correction for a few months.
2) The descent is _not_ finished and we will continue moving down for another ~2900 pips till end 2015.
The reasons that make me believe this scenario is valid are the following:
1) There have been three wave of USD vs EUR weakening since early 1970s. The present ticker contains the data of USD vs European currencies aggregate starting 1971 and the cycles are clearly visible. We can view those three cycles as a 5-wave bullish diagonal, which would require a noticeable correction after its completion. I believe the market is now drawing exactly this type of large correction which is certainly not finished.
2) I believe the latest bearish impulse wave of EURUSD started much earlier than June 2014. In fact, I regard the descent observed since May 2011 as an impulse wave of which we have almost completed wave . An observation that hints this wave count may be valid is the stunning equality of waves and , as show on the chart. The equality of waves suggests they are part of one logical structure. Projecting the development of wave and onto the possible wave and taking into account the magnitude of movement needed to obtain a sizable correction in EURUSD after three cycles of USD weakening, I aim for == equality.
3) "Naive fibonnachi" extension (2.618 from earlier trend breakout to the top of wave also suggests we should land in approx. 0.87 area.
4) Technical analysis set aside, there are ongoing issues with the economy and the search for safe haven is far from completion. S&P is making ATHs, we have yet to observe its fast decline at some point, which I believe will coincide with another wave of USD strengthening. I assume the timing of S&P reaching its top will be May-June 2015, so the start of wave of EURUSD descent aligned to the same timeframe would make sense.
