EUR/USD Medium Term Elliott Wave Analysis

In the previous analysis I pointed 1.3664 as a key resistance. The reached high from the recent rise was 1.3681 and a retreat of around 300 pips followed thereafter. From this point of view one can state that the previous analysis suggesting a long term reversal and beginning of a multi years fall with potential target parity was correct. Also as I wrote in the previous analysis the long term reversal idea is valid from a theoretical point of view as long as the euro stays below 1.3825. However I am currently not bearish at all. Nevertheless that theoretically the idea for a terminal impulse (ending diagonal) started from 1.1824 is still valid, wave 5 of it is too long which lower significantly the confidence in the presented count and is a signal that something different is developing. Also nevertheless that the previous high was broken with a little and a significant retreat followed, this fall is not impulsive in nature. If one look at the fall on the weekly chart, he can say that it could be impulsive in nature but if you go on the smaller chart frame you will see a clearly corrective movement. This means that the top is still not in place and a new high should be expected. However my experience tells me that if we see a new high above 1.3681, this will bring an acceleration of the rise above 1.40. With an eye on the above thought I consider the trend still strongly up with no signs for a reversal from the current levels. The chart shows my working count. It suggests that we have a broken bullish triangle and we are currently in wave 2 of the rise after its end. This wave 2 could be a running correction or an irregular flat correction. The difference is that the former suggests staying above 1.3367 while the latter requires overlapping of 1.3367. Because of the corrective fall, I expect the fall started from 1.3381 to be a triangle or a terminal impulse in the position of wave Y or C of 2). Currently there are still no signals what exactly is going on. If the triangle scenario is developing, at least few months consolidation should be expected between 1.3680 and 1.3380 before the end of wave 2 and beginning of wave 3 up. If a terminal impulse is developing in the position of wave C of 2, a fall to 1.3200 is allowable. If the presented idea is correct, the subsequent wave 3 should be with a potential target 161.8 % of the length of wave 1 i.e. around 1430 pips. Based on the above analysis I will try to enter long for this movement but as I already said it is still early for strategic long positions because there are no signals for the end of wave 2. A key support for the presented count is 1.2863. A fall below it will signal that the long term reversal idea was correct howsoever and in such a case one should expect a fast fall with an initial target 1.1824.

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