EURUSD Bulls Beware - Upside Limited in Every Elliott Wave Scenario

By: Enda Glynn | Tue, Dec 27, 2016
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Long term chart

EUR/USD Daily Chart
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Short term chart

EUR/USD 30-Minute Chart
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My Bias: short in wave 3 blue.

Wave Structure: downward impulse wave 1, 2 blue

Short term wave count: lower in wave iii brown

Long term wave count: lower in wave 3 blue

Important risk events: EUR: N/A. USD: CB Consumer Confidence

This weeks price action in EURUSD was a charachterised by price range contraction, but, given the larger wave count, this should not last long.

EURUSD is caught in an extended minor correction in a possible wave 'ii' brown, going on this weeks trade.

There are a few scenarios, as with every correction.

Scenario 1:

We could be witnessing a flat correction, if so the price will rise to challenge 1.0483 again, before turning down.

Scenario 2:

Or wave ii brown is already complete, and the price is declining in wave iii brown.

Or, Scenario 3:

I have shown another possible wave count, circled in red, on the short term chart which fits the price action as well as the operating wave count. The outcome of all wave counts is the exact same, A large decline is on the cards here, and we are on the cusp of it.

Either way, 1.0353 is critical, if that level gives way, the price could decline quickly. My test short position was stopped out this week, but I will be trying again, possibly next week, if the right opportunity emerges.

The main take away from the current price action is that the combined probability of any significant rally in EURUSD is very small right now. The new year could well herald some serious selling.

 


 

Enda Glynn

Author: Enda Glynn

Enda Glynn
bullwaves.com

Enda Glynn

I class myself as an Elliott wave trader now, but that's not how I started out though! It took me a long time and a whole lot of pain, to finally understand what drives the price and how to use Elliott Wave correctly!

I have been trading for years and I have tested every trading system and strategy under the sun! I used to pick entry points at random based on emotion or news events or something I heard on TV! It did not take long to destroy my capital! I have blown out my account balance before, and I had to start again,

from scratch!

Believe me, I am well acquainted with failure in trading! Im sure that the above scenario is pretty familiar to you too. We have all been there. About 10 years ago I discovered The Elliott wave Principle and its method of market analysis. Since then, I have spent years learning, testing and trading, using the wave principle as the backbone of my analysis. I even went to college to study macroeconomics and econometrics. I graduated with honours degree back in 2012. The financial market knowledge and statistical edge I gained after my degree added another level to my trading. The difference in my trading approach using the wave principle, compared to before, is like night and day.

The price started to move "my way" more and more often. The wave model, offers me a lens to view market action through, which no other form of analysis can do. Elliott wave analysis, helps me answer four key questions when I am contemplating a trade:

• What direction the price is trending.
• How far is this trend likely to go.
• Where can I enter a trade with the best risk reward ratio.
• And most importantly, at what point am I definitely wrong?!

The wave principle helps me improve my trade entry, tighten up my money management and in turn increase profitability. Seeing the waves unfold before your eyes is a very rewarding experience, It is almost like peering into the future! That is how the wave principle helps my trading, and that is why the wave principle will improve your trading. It took a long time to finally master Elliott Wave Principle. After over a decade of hard work, research and learning I can call myself an expert in the field. I regularly contribute to major trading communities at FXStreet, Forex Factory, Traders Planet. I am a chief Elliott Wave analyst at HumbleTraders.

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