Learning X waves in EUR

FX:EURUSD   Euro / U.S. Dollar
EUR looked very promisingly bullish when it approached 1.08 and bounced upwards to above 1.10 on July 21st. I hoped for a quick start of an upward looking C wave, but it didn't happen the way I wanted.

The movement from 1.08 to 1.112 had the momentum high enough to consider it impulsive, however it did not deliver five waves, but only three. I think the way to label it is simply an X wave.

X waves are all failed impulses - the market wanted to advance higher or lower in an impulsive way after completing the prior corrective structure, but lost momentum underway and had only enough energy to trace three waves. It is therefore important to consider every movement to be corrective by default until proven otherwise, no matter how strong it is when it starts.

Even if the prior corrective structure looks completed, an X wave can get in the way if the market just isn't ready to advance in a decisive manner to the new highs or lows.

Overall I do think EUR will bounce, but the completion of the correction may take another few days.
Great, similar view. Timing is uncertain yet, but a rally is coming from here.
AndyM IvanLabrie
I think this takeaway is very important. This was one of the most important things I've seen in the last month.
It's very easy to identify a completed structure. A=C, B in between, zigzag or triangle - and there we go. But it doesn't mean that the market will move impulsively after the structure.
While in the corrective structure - the market has no choice other than to complete it, delivering the "right look".
But once the structure is done, the market has a choice - whether to advance or continue correcting itself, and it does this either by producing an impulse or a X wave.
+1 Reply
Indeed, a big key. Great work Andy.
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