Monday 14 April 2014

EURUSD perfect entry

Hi Traders,

After hitting 1.39052 with a triple top (see 1-hour chart) the EURUSD (now at 1.3843) got hammered by a gap at the opening on Monday 14. This occurrence might trigger a downtrend to 1.35 and 1.30.


likely: 1.3719 - 1.3713 and 1.3671 - 1.3662
possibly: 1.3671 - 1.3662 and 1.3640 - 1.3635
maybe: 1.3470 - 1.3451


EURUSD and S&P 500 seem to be correlated lately. They both developed an orthodox top and started a "flat" with an irregular top higher than the orthodox top (wave 2 in green in the weekly chart).


The irregular top at 1.3955 was in perfect synch with the cycle of 20-21 weeks (wave 2 in green in the weekly chart).


The weekly chart shows the orthodox top at 1.3298. The Irregular top brought in the picture the perfect confirmation of "the end of the line": a "throw over" of the upper line of the giant triangle accompanied by an absolute top at 1.3455 (see the weekly chart).

Both the throw over and the irregular top in the "flat" often occur after an extended wave. In this case the extension occurred within wave 3 of a "two-step pattern" (1-2-3).

The daily chart displays 7 waves up (in green, font 8) confirming that wave 2 (in red, font 9) is a retracement wave up, not an impulse wave.

The weekly chart shows the the last wave up (from 1 to 2 in magenta) is supposed to be a two-step pattern, i.e. a 1-2-3 only.


Note the reversal "Hammer" in the monthly chart


Unless the EURUSD plunges vertically, the W.O. will deliver an entry point only after a rebound.


The expectation and the subsequent implementation of an impending "European quantitative easing" could be the fundamental reason for this  downtrend.

It's about the time. ECB chairman Mario Draghi is 2.5 years late!

Monthly chart, click to enlarge

Weekly chart, click to enlarge

 Daily chart, click to enlarge

Wave oscillator applied to the daily chart, click to enlarge

4-hour chart, click to enlarge

1-hour chart, click to enlarge