On EURUSD we see the price trapped in a big consolidation pattern, a triangle that seems to be over as of the recent bearish price movement. It’s a five wave correction, a continuation pattern that can, after its completion, push the price lower into a strong decline. At the moment we see the price trading beneath the lower red trendline, suggesting that the final wave E is finished and now more weakness may come in play. If that is the case then lower levels will follow and sometime this week a decisive break beneath the wave swing D may happen, which will be the second confirmation theat the price action of the higher degree correction is being finished.
EURUSD, Daily
Regarding the lower time frames, EURUSD fell beneath an important trendline support this month which indicates a completed EW triangle placed in a big black wave four. If that’s the case, then more weakness can be seen on EURUSD till the end of the year, especially if we consider that on the 4h chart decline is looking impulsively down to the 1.0850 area. It’s a five wave move that represents a bearish trend. However, nothing moves in straight lines so we need to be aware of a new corrective bounce, ideally in three waves back to 1.1038 resistance. But keep in mind that any pullbacks will be only temporary and short-lived patterns.
EURUSD, 4H
Triangles are overlapping five wave affairs that subdivide into 3-3-3-3-3. They appear to reflect a balance of forces, causing a sideways movement that is usually associated with decreasing volume and volatility.
Basic Triangle Correction:
