EURUSD: Review of the Long Term EWP

By: TheWaveTrading | Sun, Sep 9, 2012
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Lets begin with a chart dating back to April 1979. Don't ask me to label it because I am clueless BUT I can say the following:

Euro Monthly
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Lets move one. In the next chart I have labeled a potential count for the corrective move off the 2008 Double Top. It is a Double Zig Zag.

Euro Monthly
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It is not a "fluke" that price might be attempting to establish an important bottom at the July lows since we have the mentioned neckline that connects the Nov 2005 low + May 2010 low.

In addition we also have the 200 m MA.

If the wave (A) of the second Zig Zag is in place at the July low then it is reasonable to expect that price will achieve a Fibonacci retracement of the down leg off the May 2011 lower high.

If price is shaping the right shoulder then the current up leg should reach the 1.37 area.

If price achieves a monthly close above the 10 m MA which stands at 1.2855 and it also coincides with a horizontal support then the odds that price is involved in a multi month rebound would substantially increase.

In the next weekly chart I have labeled from the April 2008 top the mentioned Double Zig Zag sequence, in addition we can make the case that at the July low price a completed the wave (A) of the second Zig Zag (with a DZZ).

Euro Weekly
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Again since the move off the May 2011 is clearly corrective we already know that we don't have a major bottom but if the current up leg belongs to the wave (B) of the second Zig Zag then price could aim to reach at least the last lower high at 1.3486 or even the trend line resistance.

The Alt count would call for a Triple Zig Zag off the May 2011 in which case the current rebound is only a wave (x) hence the current bounce will be short lived.

In the next weekly chart I have added more information, which is suggesting that price, is attempting to accomplish a large rebound:

The next resistance is at a weekly gap = 1.2919

If this gap is closed then the odds of being a wave (B) will substantially increase opening the door to the Fibonacci retracements.

The major resistance above the weekly gap is located in the 1.3490 area (last lower high + 100 w MA + 0.5 retracement)

Euro Weekly
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In addition to the Double Zig Zag option, since price has not breached the June 2010 low, price could be forming a potential bearish Triangle wave (B). (I began suggesting this EWP on March 12).

If this were the correct pattern then price would extend the current rebound unfolding the wave (E) with a potential target in the range of the two trend lines.

Euro Weekly Triangle
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Weekly momentum is suggesting that price has established an important bottom:

Euro Weekly Momentum
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TheWaveTrading

Author: TheWaveTrading

TheWaveTrading

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The main objective of this project is to share my views on several markets and asset classes.

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