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Potential Euro/USD Post-triangle Thrust Rally Targets

FX:EURUSD   Euro / U.S. Dollar
363 30 5
Background:

In May 2014, a bearish triangle which originated in 2008 concluded at 1.39938, and the thrust measurement therefrom suggested a minimum low of 1.04402 would follow.

In March 2015, Euro             concluded the thrust wave down to 1.04624, almost exactly as prescribed by the triangle. By my count, the thrust represents 3 waves down. Next, an upward 4th wave developed as a triangle correction that ended in October 2015. That triangle provides several successive thrust measurements which should roughly correspond to the extreme high and low points to be reached during the final 5-wave             impulsive sequence down.

The first thrust measurement suggested a distance of 0.10009. From the final peak of the triangle, that equated to a low of 1.04942. In fact, the subsequent thrust wave down reached very nearly to that level at an actual 1.05837, which I label as wave (1). Measurements from within the triangle then suggested that the following corrective rallies would peak at about 1.08869 and 1.10097 and then 1.2220 and 1.14119 (or perhaps somewhere between).


Current Wave Action:

As the next expected wave was a wave (2) rally, the above levels would apply to the legs of the wave (2). In reality, a sharp spike first to 1.08930 and then 1.09811 occurred, meeting those levels quite closely. I label that sequence as wave A of (2)

From that point, price has taken the form of a contracting triangle, which I label B of (2). With the exception of what I consider to be a renegade wave E of this triangle, other waves ABC and D have fit within the contracting structure nicely. Wave E itself appears to be ending as a triangle (quite typically) and is struggling to maintain above the level 1.09236 (the bottom of wave C) while completing its own contractions in order to complete above that level, as a prerequisite to completing the triangle as a whole. The wave B triangle's thrust measurement suggests an upward distance of 0.3444. That distance may be assumed to begin from the low extreme of wave B (1.08052) or possibly from the end of wave E which I may assume will be no lower than 1.09236. In either case, the estimated upward minimum thrust for wave C would approximate the range prescribed by the above bearish parent triangle. Likely actual targets would seem to be 1.11405 and 1.12667. In any case, the wave (2) rally in total should not exceed 1.14952, the origin of wave (1).

Still consistent with the contracting triangle wave count that I proposed a few days ago (see above), it appears that 1.08255 may have marked the low of wave 'd' down and the wave 'e' rally is now well underway. Wave 'e' will be the final wave up to complete the triangle before the downward post-triangle thrust begins. In the chart above, I had suggested the level right under 1.12 as a likely peak for wave 'e', based on an assumed low of wave 'd' at 1.085. However, since 'd' registered a bit lower and wave 'e' has started to form -- giving some additional clues in its own wave structure -- I can now propose a revised and hopefully more accurate estimate of where 'e' might end:

Type 'e' waves have a 3-wave corrective structure. In this case, I perceive it as a developing zigzag (5-3-5), having begun with a fairly standard-looking 5-wave impulse up labeled wave (a), now being followed by a triangle wave (b) which looks about complete, and therefore a final 5-wave impulse wave (c) should follow as the post-triangle thrust from that wave (b). The (b) wave of 'e' appears to be targeting 1.12340 at minimum. That is very near to the following tight cluster of levels that are significant in terms of Fibonacci proportions of the proposed length of wave 'e' to other waves within the triangle as well as of the length of subwaves (a) and (c) of wave 'e' to one other:

1.12579 = wave 'e' would be .5 the length of 'c'
1.12547 = wave 'e' would be .786 the length of 'd'
1.12564 = wave (c) of 'e' (in other words, the end of 'e') would be 1.618 the length of wave (a) of 'e'

Therefore,I believe there is a very good chance that this triangle is now heading up to its end with wave 'e' ultimately in the range of 1.1256-1.1258 before a major decline in Euro/USD starts.
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Possibly a setup on the way to 1.1258:
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1.3764 was the maximum height for the post-triangle thrust, falling slightly short of my higher target of 1.141.Price has since fallen below the thrust origin, so precluding the expectation for further upward staging within the thrust wave. After a triangle thrust, which is the last wave in a corrective sequence, an impulsive decline would usually be expected to begin. The decline since then to 1.085, though, looks corrective. One plausible explanation for this is that this decline is a type "D" wave within the whole consolidation since March 2015, which I have continuously held as being a 4th wave and, which I now suspect may altogether be a triangle which is only just now nearing completion. It now only requires a final "E" wave up. Assuming this "D" wave is about done, the area of 1.118-1.12 seems a very likely upper target for a wave "E" to peak. That level not only represents a .236 retracement of what I consider to have been the 3rd wave down but also contains a cluster of Fibonacci proportions to preceding waves "A", "B", "C" and "D" (as far as "D" has gone so far). Interestingly, that level is also at exactly the same altitude as where the triangle trendlines converge. Unless this presumed "D" wave lengthens further below 1.085, the would-be triangle yields a thrust measurement of 0.26437. which from the hypothetical thrust origin at the end of wave "E" at about 1.12 would imply a 5th wave decline down to around $0.85-86.
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A 4th wave triangle now forming should spawn a 5th wave thrust up into the 1.1400s. Please see full details here:
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This is my updated wave count for the wave 'B' bullish triangle in Euro/USD. Last month's assumption that the triangle had completed was premature. However, the wave structure that has developed since then has maintained a contracting triangular structure with parameters that continue to suggest a thrust up above 1.12, and this looks likely to begin soon.
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. Note how closely the estimated minimum target of this post-triangle thrust matches the measurement taken from within the 4th wave parent triangle for a prospective high (1.12140). The parent triangle also yields a second, higher measurement into the 1.14 area, which I anticipate will follow the rally above 1.12.
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It looks like the final (E) wave just needs one more thrust down below 1.08 to complete. Provided the price does not fall below the low of wave (C) at 1.07775, I will consider that a rally will start when wave (E) ends.
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The thrust to 1.12387 has achieved and exceeded the projected 1.12140 target. Price appears to be consolidating in a smaller contracting triangle now, which suggests still further up to go. I still have reason to anticipate a higher target of 1.141 to be reached before the Euro begins its next major decline toward parity with the Dollar.
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Approaching my target of 1.141, and 1.14952 should be the upper limit of this rally, if this rally is indeed wave (2). I will short with a stop-loss above that price. I expect a decline in a wave (3) down below $1.00 to follow.
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I figure that wave (E) is nearly complete and should terminate at a low near 1.085 - 1.084 before the next upward thrust toward 1.12 and beyond begins.
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