Elliott Wave and Fibonacci Predictions

EUR/USD

After new lows few hours ago, we made a step back and checked out the four hour time frame on the euro. On this chart we can see very powerful impulsive dollar moves with almost 2000 pips in two months. A lot of traders thing that this is too much, and enough and let’s buy our euros back! But not so fast, cause on Friday, market broke through the weekly trend line support which could be very dangerous for further euro weakness. Especially if we have in mind, that prices bounced very powerfully yesterday from this line to new lows. But from the Elliott wave view; this was only the last fifth wave down which made a complete five wave sequence. This means five waves in the first wave, five waves in the third and now also five wave move in the last fifth wave of red C) of 4. Divergence looks also very strong, so euro recovery could be back after the possible bull cross above the trend line on the macd indicator.

OIL

On the chart lower we would like to show you this significant weekly trend line support that we were talking about it for weeks now. If the market truly found the bottom of the red wave 4 just above 100 dollars, then we should see a huge bounce in the coming weeks. A lot of traders are probably already long here, with their stops around $104 per barrel. But they should be very carefully; because market can send prices back down, to test the trend line again before will make any move higher. So it is better to wait on this hurricane situation and on the 11th September, because we believe in much clearer picture about possible price movements when these two will be behind us. The long term traders should put their stops somewhere below $100 per barrel.

Gregor Horvat
chief executive officer
forex analyst
Capital Forex Group LLC

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