The price action on the EUR/USD this week is like riding a high-speed rollercoaster, big news impacted the financial markets, Harvey, North Korea and Non-Farm Payrolls data coming out on Friday. Personally, I prefer to focus on the charts and understand the price using technical analysis, seven years ago Elliott Wave caught my attention, and since then it´s my treasured tool, the objective of Elliott Wave is to explain the chaotic price movements and project future prices using Fibonacci ratios.
Elliott Wave Analysis 4-hour Chart EUR/USD
The price of the EUR/USD reached the resistance 1.2070 and bounced back sharply, the destination for wave “b” green is between 1.2050 and 1.2225, the Euro visit 1.2070, and it seems that the bullish trend is not over. Elliott Wave expertise lies in forecasting price levels and shape, is not good to pinpoint specific trades. The solution comes with the strategy, and the idea is to validate the end of each wave by using other technical analysis tools.
On the four chart, the price hit the 61.8%(1.1818) Fibonacci retrace for wave “B” red, this wave it´s over, and the price is getting ready to start climbing to the previous high 1.2070, then 1.2225 that is the 50% Fibonacci retracement for wave “B” green. The plan is to buy the EURO at 1.1920 area and manage it to make the most out of this trade.
When the “B” wave green ends, the main idea will be to take a short and keep the trade for a longer term, because the bearish target is at the 1.0450, thanks to the Elliott Waves we can have ready the strategy and follow this complex market. After checking the price structure inside the wave “B” red found that the price is corrective, and with the bullish reversal (bullish engulfing candle) the wave “C” red is active.
Combine the Elliott Wave analysis with your strategy to find the end of the waves and ride the euro like a pro. Have a great rest of your day. To receive daily updates of this service on 13 different markets, please go to elliottwavedesk.com