Tuesday, August 28, 2012

Eur/Usd : Topping

Price did not break the trendline as i suggested in the previous post but bounced higher forming another leg in a corrective pattern. I do keep the idea of a triangle around 1.23 but turned it into a bullish one. Also, the leg following the triangle is 200% of the wave before the triangle. It is possible that inside this wave Y another leg higher comes now, but 1.2640 should hold as resistance zone since it's the 100% fib extention of wave W.

Sunday, August 19, 2012

Eur/Usd : Breaking the trendline

In the last update i mentioned that the rally from the low was corrective. Since then, there was another leg higher into a new high. From this high, the decline is corrective aswell and forming a small triangle which lays upon a supportive trendline. Wave E could be complete or have another leg higher, but as long as 1.2381 does not get broken, the triangle count remains valid and price will eventually break the trendline. Should price go above 1.2381, the corrective pattern could transform into another corrective pattern, like a complex double three.

Thursday, August 2, 2012

Eur/Usd : Bullish trap?

The last update (15min chart) showed a clear flat corrective wave. This wave was followed by a short range of overlapping waves, which to me can only be counted as a complex corrective wave, anything else is because you want this to fit into a bigger picture. In this case, if you watch the price action from the low, you could be fooled to believe there are 5 waves up. I prefer to count the short range of overlapping waves as a complex corrective wave which forms wave Y in a bigger complex corrective wave. Another reason why i think this is valid is because the size of this wave y of Y is 50% of wave w of Y. The most common relation between waves W and Y is 100% or 76.4%, less common is 50%, 150% or 200%. With flat corrections the relationship is most commonly 161.8%, less common 61.8% or 261.8%. In the bigger picture, we can see that the corrective price action from the 1.2389 top, could simply be the start of a wave Y, which is also corrective. Don't forget that when you're in a bigger picture corrective mode, that a change in trend does not have to come in 5 waves. This can however make finding new trends harder or riskier. In this case a break of the 1.2389 level would invalidate this count and we will have to adjust to a bigger corrective wave.