EUR/USD 4 Hour Chart

Just a quick one today as I don't have much time through the week anymore. Here is a EUR/USD 4 hour chart with a fairly obvious 5 wave move down from the recent high. I think we will continue to push higher in the final sharp leg of a correction before reversing near the 50% Fib level. This move will correlate with a push higher in risk across the board but will reverse sharply in a downward thrusting 3rd wave possibly around NFPs. Expect volumes and volatility to drop as we push closer to Friday's release.

The upward trending support that I have been watching on the EUR/USD broke last night and the move from the top can be labeled as an impulse. I am going to take a short on a pullback to 1.2345, which could be a second 2 of a 1-2, 1-2. Stops will be kept tight at 1.2395. If the 1.24 level breaks however it is likely we will be moving higher still. There isn't too much else to report as market patterns haven't been very clear over the last week so I haven't been trading. Good luck.

Some thoughts on EUR/USD

While the larger count for the EUR/USD pair is indeterminate due to the ambiguous nature of the sub-waves from the 1.5150 high, I have been focusing on shorter term patterns to decipher intra-day direction. For the past month the pair has been carving out a series of 3 wave patterns, which looks very much to me like it is all part of the same corrective move. Many people are calling for a medium term bottom in the EUR/USD and while sentiment is at an extreme which favours the bulls, I am highly dubious that this move down is yet complete. The move from 1.2670 (in red) is clearly a 3 wave move and thus cannot be the final move in an impulse, unless it is part of an ending diagonal, which is clearly not the case in this instance.

Another reason why I believe that this is not the bottom everyone is hoping for is the highly corrective nature of the move up from the 1.18765 low. If we are to see a significant retracement which relates to the entire move from the 1.5150 high, I would expect a much sharper rebound. To the left I have posted an ending diagonal count which is currently my favoured scenario from here. While it is possible that we are just in a corrective move as pictured above, I do not think the EUR/USD has much room left to fall before a larger retracement on the daily scale, and we will probably chop around in a further series of 3 wave moves for the next month or so before pushing higher. Both of these scenarios point to coming downside in the next few days, so I will look to enter short on a move above 1.25 with my stop above 1.27.

EUR/USD Ending Diagonal Possibility

Here is another insight into the possible future movements of the EUR/USD. The basis of this idea is the extremely choppy price action from the high (red 4). The 3rd scenario from the last EUR/USD post is also possible, but the other two have been invalidated. Click here for Jamie's take on things. Either way it looks relatively safe to get long from here, with your stop at 1.210 but be careful price could fall in a C of B of 2 before heading higher.

EUR/USD Possibilities

Here are several EUR/USD 4 hour charts showing the possible future movements of the pair. I have listed them in order of most favoured to least favoured. This first one is my current primary count because the move off recent from the low at 1.2153 looks very much like a leading diagonal to me. Also I am bullish on equities in the very short term but bearish in the medium term, which fits well with this count. As you can see it looks to me as if the pair has almost completed a wave ii down and is about to head higher in a wave iii. If this could is correct it is likely that price will turn soon and will test 1.245 on Monday or Tuesday. A break beneath 1.2150 will invalidate. Based on this chart I am going to take a long position at 1.2240 which is the near both the 76.4% Fibonacci level and extension where wave a of ii equals wave c of ii.

Here is a more bullish count for the pair, showing a truncated wave 5 which will be a medium term bottom. If this count is correct we will likely see a sharp surge upwards during Mondays session. I do not favour this count due to my bias towards increasing risk aversion over the coming months. If however this count is correct expect price to test 1.30 at a minimum, but more likely higher. The 38.2% Fibonacci of the entire move down from the top lies at 1.33.

Finally here is my bearish EUR/USD count. I am highly doubtful that this scenario will unravel however it is always important to be aware of both bullish and bearish possibilities. Here wave 5 has begun, and looks like it is going to extend downward. The reason I am dubious of this move is that the fall from the 1.2454 high does not look impulsive at all. However it is possible that is is a choppy leading diagonal and price is going to drop hard through 1.2150 early in the week.

EUR/USD Hourly Chart

The inverted H&S target from my previous EUR/USD chart (1.2730) has not yet been hit. I took profit near the top of the B of X after noticing that the wave looked very corrective in nature and further downside was likely. Once 1.25 broke a new H&S pattern emerged as marked on this chart, and as you can see the target was easily reached. I have not taken a long position from near the 78.6% Fib which is also the bottom of a confluence area that the pair has been between for the majority of the last few weeks. I think we will be moving up from current levels very soon. The corrective downward movement of the NZD/USD from the recent high also gives weight to an increasing risk appetite over the next few days (in a C of a flat). Keep your stops at 1.2140.

EUR/USD Inverse Head and Shoulders Reversal

Some of you may have already spotted this pattern on the EUR/USD hourly, and a similar, inverse pattern on the USDX. The EUR/USD has been holding up well over the past few days and I expect Euro strength to continue as price rebounds from oversold territory. As you can see the pair has completed 5 waves up which is either a 1 or an A, and looks to have completed a correction - labeled as a B or 2. Look to get long with risk just beneath the recent low. The H&S target is 1.2730, or for a more conservative price target the Fibonacci price extension where wave A or 1 = wave 3 or C is at 1.26.
*** Friday US Session Update *** I am taking profit on this trade at 1.2555 because the move from the bottom at 1.2470 looks corrective so we will likely be moving below there before we push higher again if at all.

Covering My Short Positions

It is 7.40 a.m. GMT and I have decided to take profit of my EUR/USD, AUD/JPY and SPX trades due to the lack of clarity on smaller time frame counts and some very bullish looking signals in the aforementioned and some other correlative markets. If you have been following my trades and want to keep up to date with my intraday movements I post live update throughout the day via my Twitter account. I will be looking to re-enter all these positions from a higher level and will post updated charts (if previous counts are invalidated or begin to seem improbable) and orders when opportunities occur. Good luck!

EUR/USD 15 Minute Chart

I believe the EUR/USD has finally started moving lower again and will accelerate to the downside after a small retracement from gap support. This will likely coincide with a drop in the price of equities, and an overall shift towards safety. The move from the top at 1.3095 so far looks impulsive and the Euro has been comparatively weak across the majors which I expect to continue over the coming few days. It does not appear that the news about the situation in Greece has done much to shift overall sentiment toward the Euro. I took a short position from 1.2990 and have my stop just above the high at 1.31. If you are looking to enter the trade wait for a pullback after the gap is closed but beware if equities drop off and the markets move into a state of panic price may slice through support at 1.2750 and 1.2550 hard and fast.

Still My Favourite EUR/USD Count

Here is an update of my favoured EUR/USD count. The wave 4 triangle count was seconds ago invalidated on a push just below the 1.3268 level. I believe an Ending Diagonal is forming and expect price to push slightly lower before retracing in a wave 4 back to around the 1.3450 area. Ending Diagonals usually form when price moves too fast too quickly, which fits well here as the drop from the top at the end of 2009 has been immense. I am not looking to trade the EUR/USD under the current circumstances as I believe the choppy price action does not offer a worthwhile risk/reward ratio.

EUR/USD Daily Chart Possibilities

Here are a few scenarios that could be developing in the EUR/USD pair. All three of these possibilities are based on the assumption the the move down from 1.3820 to 1.3270 is a 3 wave move. I have seen numerous EW charts trying to force this move as an impulse when the proportions really don't look right as a 5 wave move. While it is not impossible that I am incorrect, I think it is highly unlikely that the move is a 5 and not a 3. The chart to the left is of an ending diagonal wave 5 and is my primary count.

This next chart is of an irregular flat wave 4. For this count to remain valid, the wave 1 extreme at 1.42 must not be breached.

My final chart for the EUR/USD pair is a wave 4 triangle count. For this count to remain valid price action must remain below the top of wave a at 1.3820.

EUR/USD Double Zig-zag

 

This is my current view of the EUR/USD pair. I think a double zig-zag is forming, primarily because the price action of the beginning of the wave I have labeled as X does not look impulsive, even on a minute scale, so I think there is another downside corrective move to come, most likely another zig-zag, which should take the pair closer to the 61.8% Fib where I will be looking to buy.

The EUR/USD has bottomed

 

The EUR/USD looks to have bottomed at 1.3435. I was completely expecting another low and tried several times to get short but to no avail. I lost out repeatedly trying to pick a top that never even eventuated. Two things I can learn from this experience:

1. Don't get too attached to any single count. There are always bullish and bearish counts, and it is important to always be aware that either could eventuate.

2. Don't over trade. Making multiple small risky trades in the hope of catching the turn is just stupid. If I'm going to take risks like that I may as well go to the Casino. Boredom is no excuse. 

I am setting myself a limit of 3 trades per day from now on until I learn better trading habits. I am going to set my orders and stop losses and try and walk away. I'm not a scalper nor do I aspire to be one. I am ideally chasing trades that last over several days and net 100-500 pips.

Enough about that anyways, here is my EUR/USD count for now. The range I spoke about last night has broken to the upside, and I expect another wave up before a Fib pullback. I have drawn the Elliott Channel and some levels based on Fibonacci ratios where I think the pair might reach before rebounding. I am not going to try and scalp from here because it is possible that the 5 waves up is already complete. For Jamie Saettele's video with his take on the pair click here.

My trade plan is to wait for a significant pullback, be it from the current high, or after another move up, and to buy at the 61.8% retracement. If my prediction in the above chart is correct I will be looking to buy at 1.3570 with my stop at 1.3440.

Range Bound EUR/USD

 

Trying to work out the direction of the EUR/USD based on EWT has been painful for me recently, so I am going to ignore any more counts until this consolidation is over, and focus on some simple technical analysis. As you can see from the above chart the pair is in sitting in a clearly defined range between 1.345 and 1.368. At present price is nearing the top of the range, and RSI on the hourly is nearing overbought levels. The long term overall trend is down. All these things point to future weakness in the Euro, so I am going to attempt to range trade this pair by shorting at the top of the range, with my stop just above it.

A Different EUR/USD ED Count

 

Here is another possible EUR/USD Ending Diagonal count. For this count to remain valid price should not exceed 1.3690. Price falling beneath 1.36 will be a very bearish indicator in the short term and I will be taking a short position if this occurs, however if price pushes above 1.37 it is likely the ED is complete and we should wait for a pullback to get long against the low at 1.3440. 

EUR/USD Update

 

I have been examining the wave count in the USDX and current price action doesn't fit with the count I just posted in the EUR/USD. I have reviewed my charts and I now think we may still be in a C leg of the final B wave with the final C down still yet to begin. I am now sitting out until I see a 5 wave move down to complete the 5th wave of the ED from which point I will be getting long.

EUR/USD Hourly Chart ED

 

My EUR/USD count is inversely similar to my USDX Ending Diagonal Count, however the final C of the ED in the E/U is much more clear than the its parallel in the USDX. The recent spike down to 1.3435 has been met with strong resistance and an ending diagonal may be complete. I think it is more likely however that this was just a wave 4 and there will be one more sharp spike down followed by an even quicker reversal to complete the ED. If my count is correct there will likely be a sharp retracement over the coming weeks to the near the origin of the diagonal, around 1.458. Look to get long just below 1.34 or on a push above 1.352. 

 

EUR/USD Bullish Possibility Update

Sorry everyone if I've been confusing you with all my competing counts. I'm merely giving you some of the possibilities it's up to you to decide which one you think is correct. Thanks to Dave for reminding me about my chart from the last week which gives this count. As you can see the EUR/USD may be completing a B wave down with a C leg still to come. 5 waves down for C of B looks complete or almost complete. If you're bullish on the pair keep your stops at 1.4265.

EUR/USD Bearish 5 Minute Chart

Here is an update of my bearish EUR/USD count. Support at 1.441 is where the drop from 1.452 is approximately equal (by price) to the previous 2 drops down shown in the chart from 1.458 and 1.4556. This may not be significant, however Elliott Waves are often Fibonacci ratios of each other, 1:1 being one of them. This is my favoured count at present and I expect further downside. I have moved my stops to 1.4447 (the bottom of wave i) as it is important to protect profits in these choppy conditions, and a break back above 1.4447 negates this count.

*** EDIT *** Sorry a break about 1.4492 negates this count, not 1.4447. Although I was stopped out of my short trade with +93 pips, my bias is still to the downside and I will look to get short again on a pullback or a break back below 1.4410.

EUR/USD 15 Minute Chart Bullish View

Here is a bullish 15 minute count for the EUR/USD pair. There may be another impulse wave up coming to complete the 5 waves up from 1.4265. A break back below 1.4473 negates this count and puts the focus back on a bearish count.

*** EDIT *** This count has just been invalidated. Stay short on this pair.