Scenario for a Long Correction in EUR/USD
Updated
It appears as depicted in the chart,
the daily closing price halted precisely at the trend-line.
This suggests that the price is likely to go downward
before resuming its bullish trend.
This differs from my analysis in a post a few days ago.
In that post, I speculated that the appearance of a bearish leading diagonal
would mark wave 1 of a downward trend,
but it seems it may only be wave A of a correction,
or perhaps just a double three correction.
Another reason why I calculate this correction as wxyx (indicating there will be one more downward swing)
rather than abc (suggesting the price will go straight up)
is the form of the recent two-day upward movement
that formed a perfect zigzag (wave x) as we can see in the lower time frame,
followed by a downward impulse (wave a of z).
nb: this z would take form as a corrective wave (abc) and not a full impulse
However, it's worth remembering that the two strong impulses last Friday
could potentially be waves 1, 2, and 3, continuing the bullish trend.
I've included an invalidation level for those who aggressively take a sell position.
In my opinion, the best approach is to wait for the price to break below Thursday's low,
await a reversal pattern as confirmation,
and then take a buy position.
It would be nice if the price rebounds according to Fibonacci ratios as shown in the chart.
the trend-line would also help us to know the reversal.
It sounds like you're eager to take profit!
Patience is key in trading,
but when the opportunity arises, seize it with confidence.
how about you?
Happy trading!
the daily closing price halted precisely at the trend-line.
This suggests that the price is likely to go downward
before resuming its bullish trend.
This differs from my analysis in a post a few days ago.
In that post, I speculated that the appearance of a bearish leading diagonal
would mark wave 1 of a downward trend,
but it seems it may only be wave A of a correction,
or perhaps just a double three correction.
Another reason why I calculate this correction as wxyx (indicating there will be one more downward swing)
rather than abc (suggesting the price will go straight up)
is the form of the recent two-day upward movement
that formed a perfect zigzag (wave x) as we can see in the lower time frame,
followed by a downward impulse (wave a of z).
nb: this z would take form as a corrective wave (abc) and not a full impulse
However, it's worth remembering that the two strong impulses last Friday
could potentially be waves 1, 2, and 3, continuing the bullish trend.
I've included an invalidation level for those who aggressively take a sell position.
In my opinion, the best approach is to wait for the price to break below Thursday's low,
await a reversal pattern as confirmation,
and then take a buy position.
It would be nice if the price rebounds according to Fibonacci ratios as shown in the chart.
the trend-line would also help us to know the reversal.
It sounds like you're eager to take profit!
Patience is key in trading,
but when the opportunity arises, seize it with confidence.
how about you?
Happy trading!
Note
the price pierce through the resistant, nextvtarget would be 1.09500
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