EverythingForex

Analysis: EURUSD: LT* Outlook + ST* Bear Bat OR Bullish Cypher

FX:EURUSD   Euro Fx/U.S. Dollar
*LT = Long Term
*ST = Short Term

Last week, I posted a long term analysis on this pair outlining a bearish flag being formed on the Daily Chart and outlined a case for going LONG on this pair. I also posted a bearish crab pattern which hit target 1 for +206 pips.. (see Related Ideas: "UPDATE #2: EURUSD             Bullish Crab Pattern - A Case To Go LONG").

Well, this week, after reviewing last week's price action, I have revised my LONG TERM outlook somewhat to reflect what happened last week. I have also posted 2 SHORT TERM possibilities in the above main chart. One a Bearish Bat pattern and the other a Bullish Cypher pattern. I'll talk more in detail about these 2 patterns in a bit.....but first.....

OVERVIEW
As you can see by the below chart that we are currently in a corrective wave following a almost 10-month long 5 wave impulse wave down.
snapshot

THE CORRECTIVE WAVE - 2 POSSIBILITIES
Within this corrective wave, there are a couple of scenarios for it's completion that I have laid out. Of course, there could be other ways that it may eventually follow but these are the 2 that I think have the highest probability of following.

Scenario #1 - Crab Completion (I favor this one):
In this scenario, wave 2 would unwind in a ABC Zigzag corrective wave. Prices currently are in wave B of the ABC zigzag pattern and this wave B is tracing out a 5 wave symmetrical triangle pattern . Following it's completion, wave C up of the ABC zigzag would end in the SR Structure Zone, at/near the 50% retrace of the previous impulse wave down, and complete the bearish crab pattern. Also, an AB=CD pattern would be completed as well.
snapshot

Scenario #2 - Bullish Cypher Completion
In this scenario, if this cypher were to be completed, it would necessarily nullify the Crab Completion scenario because it would essentially break the wave B symmetrical triangle possibility above. In this case, this corrective wave could have 2 more possible ways to unfold.
1. It could just trace out a large 5 wave symmetrical triangle outright before resuming the main trend down. (shown in red)
OR
2. It could complete the bullish Gartley pattern and finish wave B at that point and then go up to complete wave C ending at/near the .382 retrace of the previous impulse wave down or extend and complete the crab inside the SR Structure Zone before reversing and resuming the main trend down. (shown in black)
snapshot

CONCLUSION:
Since in any case, I am bullish due to my labeling of this corrective wave being in wave B of an ABC zigzag or sideways contracting symmetrical triangle, I am looking for LONG opportunities to catch the wave C.

In the SHORT TERM, if the bearish bat were to complete, then the bullish cypher would be invalidated as prices would have exceeded the 1.414 max extension allowed for a cypher pattern . If so, then I would look to place SHORT positions via the Bat. If prices start turning down without filling the bat, I will WAIT for the cypher to complete and then place LONGS and HOLD them because the cypher would complete at/near the lower trend line of the wave B of the ABC pattern as outlined in the "Crab Completion Scenario". Upon reaching target 1 of the Cypher , I would take off 30% of my LONG positions and HOLD the other 70% and watch what happens after. If prices reverse and head back down and violate the lower trend line , I would close my LONGS at break even and again just watch what happens via the second "Gartley Completion Scenario" and look for another opportunity to go LONG after the Gartley is completed.

If you like my analysis and find it useful, please take a second and hit the LIKE button and follow me. It takes some time to create these posts and your LIKES let me know it is helpful to you. As always, any comments are welcome. Agree or disagree.
MTD REAL Documented Results: over +2000 pips PROFITS!
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