3 - Crash Sequence & Brexit Volatility vs Wave Patterns
The bearish reversal which started back in February 2018 for EUR/USD has been labeled as a complex three-swings sequence in Cycle Wave X (blue). Its Primary degree sub-waves have been labeled as ABC (red), with Primary A (red) finalizing the sell-off with the middle of August 2018.
Primary B (red) has been labeled as a Double Three structure, with its Intermediate (W)(X)(Y) (turquoise) sub-waves developing under a complex corrective sequence, in which Intermediate (X) (turquoise) presents a Contracting Triangle as the termination point.
The Descending Channel displayed on chart could have an impact on the overall structure in Primary B (red), in the sense that the present sequence could reflect either a Running or Expanding Flat scenario. The upper trend-line would be in focus, as the next swing could determine EUR/USD’s fate for a few months ahead.
In a Running Flat scenario, the EUR/USD could present more weakness ahead and the French elections gap could be the next best interpretation in an attempt for the fill. In this scenario a bearish impulse could commence, and the sell-off could aspire for the lower trend-line of the Descending Channel.
As an alternate scenario, the Expanding Flat would imply a bullish break-out of the Descending Channel’s upper trend-line, and the EUR/USD could commence a sustained bullish impulse.
The preferred scenario and the overall outlook for the EUR/USD within this report would reflect the Expanding Flat structure, in which Intermediate (Y) (turquoise) could be ready to begin a bullish impulse and possibly complete the entire structure.
In both scenarios, the 1.1410 area could reflect as a Point of Interest and the key trigger for the next trend.
A bullish reaction could begin in an impulsive manner, from the 1.1410 and/or 1.1380 area, towards the vibration zone marked between the 1.1940 and/or 1.2100 levels.
Primary B (red) could finalize at or around the 50-61.8% Fibonacci Retracements of Primary A (red), with a possible Head & Shoulders formation.
Primary B (red) has been labeled as a Double Three structure, with its Intermediate (W)(X)(Y) (turquoise) sub-waves developing under a complex corrective sequence, in which Intermediate (X) (turquoise) presents a Contracting Triangle as the termination point.
The Descending Channel displayed on chart could have an impact on the overall structure in Primary B (red), in the sense that the present sequence could reflect either a Running or Expanding Flat scenario. The upper trend-line would be in focus, as the next swing could determine EUR/USD’s fate for a few months ahead.
In a Running Flat scenario, the EUR/USD could present more weakness ahead and the French elections gap could be the next best interpretation in an attempt for the fill. In this scenario a bearish impulse could commence, and the sell-off could aspire for the lower trend-line of the Descending Channel.
As an alternate scenario, the Expanding Flat would imply a bullish break-out of the Descending Channel’s upper trend-line, and the EUR/USD could commence a sustained bullish impulse.
The preferred scenario and the overall outlook for the EUR/USD within this report would reflect the Expanding Flat structure, in which Intermediate (Y) (turquoise) could be ready to begin a bullish impulse and possibly complete the entire structure.
In both scenarios, the 1.1410 area could reflect as a Point of Interest and the key trigger for the next trend.
A bullish reaction could begin in an impulsive manner, from the 1.1410 and/or 1.1380 area, towards the vibration zone marked between the 1.1940 and/or 1.2100 levels.
Primary B (red) could finalize at or around the 50-61.8% Fibonacci Retracements of Primary A (red), with a possible Head & Shoulders formation.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.