Whilst EURUSD has been declining since Feb 2013 high and has been in down trend since, it does not seem to be over yet. Regardless of the development of the Cyprus and EUROZONE development, based on EW count the Dollar index needs to make a final leg up to complete the cycle suggesting that EURUSD for the coming week is likely to be weaker and could form low around 1.28 to 1.27. Once that low is completed then it could start new up trend and either develop into Pattern "A" or "B". Based on "A" it could retest Feb high or make new high around 1.38 level. But more likely the expected low will form wave "X" bottom from where we will see another ABC move to the upside similar to the move from JULY 2012 - Feb 2013. My reason for this and longer term potential move is explained in the recording you can view at the link - youtu.be/Dq2YJPDrs08
Comments
DanV
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So far from the last update you will note that I am still expecting the recent low is significant low and feel that it is a connective wave "X" and will now see larger degree ABC development to the upside as shown in the Beige coloured box till price action say that it is wrong.
StockFxMarket
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Well done
DanV
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The loading of recorded video on to Youtube will soon be ready covering my reason why the DXY will be in long term new downtrend and invalidation point and implication on USD pairs for intermediate & long term if any of you are interested. youtu.be/kXoU6ZFp_c8
traderWgun
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Good work! I want to learn EW, do you recommend a certain book? I have Mastering Elliott Wave Principle by Constance Brown and Elliott Wave Principle - Key to Market Behavior by Frost and Prechter.
But there are alot of books, so I'm lost...
DanV
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Yes, it is confusing, I would stick to Elliott Wave Principle as main one. If any other helps to clarify then OK. Focus on main framework 1st and then gradually fill in other details.
traderWgun
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Ok, thx for the quick answer. I hope you keep making vids, much better than charts :)
DanV
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After that eventful week, it looks like we have a potentially an important bottom in EURUSD in place. On Thursday of last week the day it spiked low also closing at the high of the day on relatively very high volume and according to COT data over 30% increase in bearish speculation suggest that this low is likely to be very significant one. If that is the case then I believe that this decline from Feb high is likely to ve and "X" wave shown on the box as schematic diagram and could not anticipate another A,B and C waves to the upside that would takes beyond Feb high in due course. Also it is interesting that the Dollar Index has also topped with completion of 5 waves to the upside. Here is the updated chart of the EURUSD.
DanV
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Here is the larger time frame chart with the above mentioned modification. Major turning points are most of theme difficult spot so a caution should be exercised so as not to be left behind. However, being in the right spot overall for potential low, we can monitor this for any sign of new up trend developing.
DanV
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There is much excitement amongst EURUSD traders as we hit the potential low area and the question now remains, it is this it or do we have any more downside still left. There are 2 points, in my consideration. 1st is that whilst not Gtd, the correlation chart analysis with ESP35 index which is in what appears to be Wave B in overall correction that Matches with EURUSD correction since Feb High still needs minor wave 4 and 5 before ESP35 completes it's Wave B. If EURUSD was to move in sync then it too has bounce which started today and then another leg lower, which could bottom around 1.27 or may be 1.2680 area. Here is that chart of correlation - screencast.com/t/bUkt01ls7AA . The 2nd point is considering the price structure of the bounce so far today suggest that it is corrective.
scalpper
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Agree with your assessment on dollar index. This could correspond with Fed tightening...if that day ever happens. All correlated assets starting with stocks down, dollar up.