Potential Bounce at 1.0818, Rally to 1.18 area in Wave C of 4
Technically speaking, the triangle (as I had labeled it) has been invalidated by the drop to 1.0807 today. That was a breach of the 1.0818 low, which was the low of wave "a": waves "c" and "e" should not fall below wave "a". However, following the drop to 1.0807, it looks like a converging triangular pattern is still in place. Sometimes, what happens is that what seems to be a perfectly valid symmetrical triangle pattern develops over time and is spoiled by a sudden violation of the "a" low by the "c" or "e", and yet it goes on to form waves until an apex and a subsequent thrust. In those cases, what is realized is that the whole structure up until the point of the violation was itself the "a" wave, and the remaining "b,c,d,e" waves form rapidly thereafter. Whether that is happening here remains to be seen. If it isn't, I suppose I'll need to consider total price action since 6/18 as a "c" of "ABC" instead of "c,d,e" of a triangle view. --7/21/2015
This is a further note to my comment earlier today, which is prompted by price action in the last hour. This may seem contrary to what I noted above, but bear with me. Since the drop to 1.0807, the price did indeed continue in a converging structure until it suddenly burst upward in what was a very clear impulsive pattern. Keep in mind that "e" waves can be triangles themselves. If 1.0807 was the bottom of "e", then it was wave "a" of "e". Since 1.0807, I count a "b", "c", "d" and a final "e" which ended at 1.0819 and immediately preceded the impulse. I am therefore inclined to consider the possibility that this is the first stage of the upward thrust previously forecast. This is to say that regardless of the "e" wave's low extreme having been below the "a" wave of the larger triangle, the fact that the "e" was a triangle which ended above wave "a"'s low is the key point. It seems viable in my opinion, as 4th waves, which are similarly often triangles and which should be limited by the extreme of their corresponding 1st waves do nonetheless quite often cross into the area of the 1st waves but ultimately do not end there. Therefore, I believe we may say that the "e" wave did not ultimately violate the bottom of the larger triangle, as it did not end there; it ended above it at 1.0819. Given this, and given that the price does not drop below 1.0819, we may consider that the triangle is still on track for the original thrust target of 1.18.--7/21/2015
If this is the final "e" wave of a bullish 4th wave triangle, thrust estimate indicates a rally to the 1.18 level. This depends upon price staying above the low of wave "a" which is 1.0818.
Downward thrust from the presumed final bearish triangle of wave "e" suggests a drop to at least 1.0839 before the upturn. I would put a stop loss at 1.0816 on a long trade.
This is a further note to my comment earlier today, which is prompted by price action in the last hour. This may seem contrary to what I noted above, but bear with me. Since the drop to 1.0807, the price did indeed continue in a converging structure until it suddenly burst upward in what was a very clear impulsive pattern. Keep in mind that "e" waves can be triangles themselves. If 1.0807 was the bottom of "e", then it was wave "a" of "e". Since 1.0807, I count a "b", "c", "d" and a final "e" which ended at 1.0819 and immediately preceded the impulse. I am therefore inclined to consider the possibility that this is the first stage of the upward thrust previously forecast. This is to say that regardless of the "e" wave's low extreme having been below the "a" wave of the larger triangle, the fact that the "e" was a triangle which ended above wave "a"'s low is the key point. It seems viable in my opinion, as 4th waves, which are similarly often triangles and which should be limited by the extreme of their corresponding 1st waves do nonetheless quite often cross into the area of the 1st waves but ultimately do not end there. Therefore, I believe we may say that the "e" wave did not ultimately violate the bottom of the larger triangle, as it did not end there; it ended above it at 1.0819. Given this, and given that the price does not drop below 1.0819, we may consider that the triangle is still on track for the original thrust target of 1.18.--7/21/2015
If this is the final "e" wave of a bullish 4th wave triangle, thrust estimate indicates a rally to the 1.18 level. This depends upon price staying above the low of wave "a" which is 1.0818.
Downward thrust from the presumed final bearish triangle of wave "e" suggests a drop to at least 1.0839 before the upturn. I would put a stop loss at 1.0816 on a long trade.