EUR/USD zoom in on the hourly: Ending diagonal not yet complete!
I closed my longterm longs and switched to short based on the large bat and trendline re-test earlier today.
Whilst I believe that we are at or at least close to the start of a good retracement I did have the feeling that the current wave may not yet be over. That's also why I said 'bat (almost?) filled'...
I'm now looking at smaller timeframes to see what the possibilities are and this is what I see on the 1H chart: an ending diagonal (rising wedge) which is not yet complete imo... (2 waves left, a 4th wave down and a possible 5th wave up after that to new highs...). Also: it is not confirmed that wave 3 is actually complete since the trend is not broken and the fast EMA's (13 and 21) are still holding on this timeframe...
I will now look how this structure will further develop, in theory waves 4 and 5 in an ending diagonal should be 3-wave structures. Wave 5 usually ends close to the trendline between 1 and 3 so this means that it is very well possible that we will end significantly above that longterm trendline and the bat D point from my previous idea (!)
REMARK: Some people might count my circled wave iii as the first wave within the diagonal (and thus we would have finished wave 5 today...) but that is actually not how it should be counted! That said, that doesn't mean that we can not go right down from here-on and break the diagonal, it is just less likely...
I will adjust my target for my previous short based on this scenario.
Bat and trendline re-test short setup:
Whilst I believe that we are at or at least close to the start of a good retracement I did have the feeling that the current wave may not yet be over. That's also why I said 'bat (almost?) filled'...
I'm now looking at smaller timeframes to see what the possibilities are and this is what I see on the 1H chart: an ending diagonal (rising wedge) which is not yet complete imo... (2 waves left, a 4th wave down and a possible 5th wave up after that to new highs...). Also: it is not confirmed that wave 3 is actually complete since the trend is not broken and the fast EMA's (13 and 21) are still holding on this timeframe...
I will now look how this structure will further develop, in theory waves 4 and 5 in an ending diagonal should be 3-wave structures. Wave 5 usually ends close to the trendline between 1 and 3 so this means that it is very well possible that we will end significantly above that longterm trendline and the bat D point from my previous idea (!)
REMARK: Some people might count my circled wave iii as the first wave within the diagonal (and thus we would have finished wave 5 today...) but that is actually not how it should be counted! That said, that doesn't mean that we can not go right down from here-on and break the diagonal, it is just less likely...
I will adjust my target for my previous short based on this scenario.
Bat and trendline re-test short setup:
Comment:
Closed my short BTW at 1.1250, entered a small long at 1.1233 with tight SL below the trendline...
Comment:
Structure broke, I wasn't around to enter short on the breakout, looking for at least an ABC correction now..., up to 1.1080 to 1.1060 may be possible.
We may have finished wave A but it's impossible to know for sure...
Depending on the type of correction and where a possible B wave might end we could get a good and fast C wave short opportunity. We'll have to wait and see what happens...
We may have finished wave A but it's impossible to know for sure...
Depending on the type of correction and where a possible B wave might end we could get a good and fast C wave short opportunity. We'll have to wait and see what happens...
Neutral, seeking confirmation...