ANALYSIS #1: EURUSD: BEARISH In Downtrend But How Far Will Go?

FX:EURUSD   Euro Fx/U.S. Dollar
1646 22 26
Last 2 weeks, we saw this pair shoot up higher, breaking the triangle pattern and looking very bullish only to have it completely retrace back down from that spike high back into the triangle and stay there. Not even the NFP moved it. So what does this kind of price action tell us? Let's dive into this pair and see.....

WEEKLY CHART - Updating The Weekly Chart I Posted 28 Days Ago: Contracting Triangle Looking More Likely
This is the weekly chart I posted 28 days ago before prices spiked up.....
Here it is now updated with the latest price action. In the weekly view, you can clearly see that the recent spike and subsequent retreat in prices is showing as being contained within the triangle and has NOT broken it (closed above).
Contracting Triangle Completion Scenario
Here, I cleaned up the chart to show only the contracting triangle pattern ....

DAILY CHART - A Completed Wolfe Wave Targeting 1.00000 Level
A Wolfe Wave has been completed at the recent spike highs which was a E point "overthrow" and a subsequent deep retrace back under the upper trend line of the Wolfe Wave . This is of course bearish price action. Notice that the target line for the Wolfe Wave is almost targeting exactly at the 1.00000 price level. A very psychologically significant level.

I have also re-labeled this completed Wolfe Wave as a 3-3-5 flat wave as a possible end to the larger wave (4) corrective wave with the current decline in prices as the start of the final wave (5) of the MAJOR DOWNTREND.

4HR CHART - Two Scenarios As To How Prices May Unfold In The Near-Term Going Down
There are 2 ways that I see the current price action unfolding although both have the same result in the end:
Scenario #1 - A POSSIBLE POTENTIAL Bullish Crab
Prices will rise from its' current level back up to retest the upper trend line of the Wolfe Wave (and triangle. After hitting that upper trend line , prices will then fall. There is a POSSIBLE POTENTIAL Bullish crab here with its' B point marking the possible end of the wave 1 of the wave (5) and its C point yet to be established. Keep in mind, in this scenario, the triangle pattern can still be completed.
Scenario #2 - Completing The Triangle + A POSSIBLE POTENTIAL Bullish DEEP Crab
Obviously, the difference here is that prices will continue to decline more in possibly completing wave 1 of wave (5) right down to the lower trend line of the triangle and then bounce back up from there to retest the upper trend line of the Wolfe Wave in a wave 2 of (5). This would establish the B point of the DEEP crab right near that triangle's lower ascending trend line .

With the recent bearish price action, what I showed here could be the coming price action. There is not telling that I would be correct in this and subsequent price action could prove me completely wrong. However, a continued decline in prices CANNOT be ruled out and if so, this is how I see it happening.

I will wait for prices to retest the upper trend line of the triangle (and Wolfe Wave ) before deciding to take any action. When it does and I see bearish price action, then I will SHORT this pair for a ride down in a wave (5) and heading to the 1.00000 level. For now, I am just watching and waiting.....

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Hi EverythingForex ,
Great work mate , you are right , We need other people views ,how they are looking into market to make right decision.
Thanks. And yes, I agree. I always say to be successful in trading, you MUST see with an open mind. It's tough to do for most because it is so ingrained in us to want to be right that sometimes we become blind to what is right in front of us and we refuse to see the obvious because we are determined to be "right". Winning in trading is NOT about being "right" in so much as being WITH the market in whatever direction it goes. If the market decides that it rather move up instead of down as I have analyzed, you can bet that I'll be happy to admit I'm wrong and I will be ready to move with it.
that's a grate lesson, tnx man. very explicit !
One question, if you have the time. Is the Abcd a named pattern ?
ABCD is NOT the same as AB=CD. So not sure which you are referring. So I'll answer on both. No. ABCD is not a pattern in itself. it is just a way to name the points in a pattern (not necessarily an advanced pattern either). AB=CD is a pattern in itself and can be used that way. AB=Cd patterns happen frequently but IMHO, they aren't so reliable. Also, remember that there is AB=CD and AB=CD Extended as well. It's a little bit confusing since in an AB=CD extended pattern, AB does not actually equal CD but that is the accepted naming convention so who am I to change it? :-)
+1 Reply
ViorelVladut EverythingForex
Tnx a lot man! i was referring to the ABCD as a way to name the points. . when you refer to Ab=CD extended pattern you refer to bat pattern, butterfly pattern, crab pattern (that's all I know and has to do with ab=cd ). If you can point me to the right direction where I can learn all about ab=Cd extended patterns and I'd appreciate. keep it up!
Yes. you are correct. The AB=CD extended are part of the extension advanced patterns like butterfly and crabs. But it is still a pattern of its' own. Read Scott Carney's book on advanced patterns. I think Harmonic Trading Volume 1 is the one where he talks about the AB=CD pattern and the extended AB=CD. If you are looking to get more education on advanced patterns, read all his books if you haven't done so already.
ViorelVladut EverythingForex
Thank you!
Hello, complete analysis to consider. Long term i also expect the parity but using EW time projection it would be by june 2016. Now we are in complex wave 4 so more choppy sideways action expected, price can change direction anytime. I have discarded the triangle and my prefered scenario now is a WXYZ structure. Agree, we are not predictors here but followers of the market. Regards.

EURUSD-We knew it! Complex WxYxZ correction developing
+1 Reply
EverythingForex PRO FullTimeTrader
I actually agree with you about the triangle. See my other post on this pair showing a bullish scenario and that the wave (4) correction is in fact, not over but wave (C) of the ABC correction has still not even begun yet. This is the scenario that I actually prefer and that I posted a month ago. I've been VERY BULLISH on this pair for a while and still am until proven wrong. If my bullish sentiment is wrong, then this bearish scenarios will apply. If it turns bearish, I'm not thinking parity will be that far off though.
ANALYSIS #2: Bullish Scenario.Triangle Holds Wave (C) UP!
complete and helpful as always; thank you
EverythingForex PRO farid_ardavani
you're welcome. just be careful on this pair for now. At the moment, it can break either way so therefore, I'm on the sidelines for now. Watch the price action for clues.
EDIT: In my "Scenario #1" charts, I mistakenly named the "crab" as a "Bullish DEEP Crab". In that scenario, that crab is a regular crab and NOT a DEEP Crab. In "Scenario #2" it would be a DEEP Crab. Sorry for that mistake!
the 240 chart shows a flag indicating a down bearish move I agree with you the target to be 10,000 so when do you suggest the right time to sell possibly from 11120
Yes, there is a flag forming. Good observation. But thing about a flag pattern is that you don't know when it will end. Best thing to do with a flag pattern is to wait for the breakout of the lower bounds of the flag. For now, my analysis indicates some upward movement. But as I also say, there is yet to be another leg down in this pair in a wave 5 and this wave 5 may go pretty far. Possibly down to the 60 cents level. It is also possible that this flag may only lead to a very short move down in extending the wave 3 ending as I also indicated is a possibility. Then comes the wave 4 up into the 72-74 cents level. Then the wave 5 down. But here's where you should be careful. If the flag does break and go down, I do not think that is the wave 5 starting. Without a clear wave 4, the next major move down isn't likely to happen just yet.

Then again, this is all just one man's opinion and the market could prove me entirely wrong! It's happened before and will happen again..and again...and again...! Good luck!
HaroMaster EverythingForex
Possibly down to 60 cents... are you sure EF?
SORRY! I've got so many charts and set ups in my head right now, I'm getting pairs mixed up!!! I thought I was commenting on the AUDUSD pair! My mistake! Forget everything I just said above in my last comment.....except for the last part about one man's opinion.

Yes, there is a flag forming but it's not a very good flag, IMO. Still, there looks to be one more move down in EUR as well. As I state in my analysis, for me a good time to sell will be when I see bearish price action if/when prices move up and meet the upper trend line of the triangle OR if/when it moves down and meets the lower trend line of the triangle, consolidates there and shows more bearish price action. Both places would be good selling points. But in both cases, must be patient and watch the price action first! Don't jump the gun and just sell just because it reached the trend lines. Good luck!

And sorry again for the mistaken comment!

peterB EverythingForex
Thank you for your suggestions I am not sure what 60cents mean I only joined the team recently I assume it means 11060 the risk reward is better if it gets down to 11072 I will wait to see the next move Tuesday.
peterB peterB
sorry I meant the other way round 060 is better than 074
No. That is not what I meant at all. The 60 cents I was referring to is about the AUDUSD pair and not this EURUSD pair. The 60 cents has nothing to do with the EURUSD pair.
The 3 Buddha is completed, and the bull is going to push uptrend to 1.17 and then will retrace down to 1.09. That my opinion,just opinion
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