*ST = Short Term
Last week, I posted a long term analysis on this pair outlining a being formed on the and outlined a case for going LONG on this pair. I also posted a pattern which hit target 1 for +206 pips.. (see Related Ideas: "UPDATE #2: EURUSD 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 pattern and the other a pattern. I'll talk more in detail about these 2 patterns in a bit.....but first.....
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.
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 - Completion (I favor this one):
In this scenario, wave 2 would unwind in a corrective wave. Prices currently are in wave B of the pattern and this wave B is tracing out a 5 wave symmetrical . Following it's completion, wave C up of the would end in the SR Structure Zone, at/near the 50% retrace of the previous impulse wave down, and complete the pattern. Also, an pattern would be completed as well.
Scenario #2 - Completion
In this scenario, if this were to be completed, it would necessarily nullify the 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)
2. It could complete the 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 inside the SR Structure Zone before reversing and resuming the main trend down. (shown in black)
Since in any case, I am due to my labeling of this corrective wave being in wave B of an or sideways contracting symmetrical triangle, I am looking for LONG opportunities to catch the wave C.
In the SHORT TERM, if the were to complete, then the would be invalidated as prices would have exceeded the 1.414 max extension allowed for a . 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 to complete and then place LONGS and HOLD them because the would complete at/near the lower of the wave B of the pattern as outlined in the "Crab Completion Scenario". Upon reaching target 1 of the , 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 , 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 is completed.
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