Elliott wave analysis of the weekly correction
Contrary to previous weeks forecasts, Euro-dollar price has closed well above the bearish channel. Now, this weekly close warrants a re-evaluation of the long term forecast.
However, a single candle close (regardless of the timeframe) does not pose a significant impact in terms of the overall direction of the market. But it could be useful to analyze any possible continuation of the recent bullish sentiment.
If you remember we have been rooting for a triangle structure as the wave-4 correction for a long while. However, this could turn out to be a simple ABC. If the correction is to be an ABC structure, the market is currently in the wave-3 of the C wave.
EURUSD 4 Hour
There is still no convincing lower degree wave counts to support an overall ABC correction in the intermediate degree (weekly chart snapshot.)
So the expectation stays with previous weeks’ forecasts. But I would stay on the sidelines on EURUSD and rather watch it from distance at least for next couple of days; until the market shows clear signs with regards to the long term direction.
On the other hand, last week could be just the market winding up to unleash the bearish impulse.
EURUSD Hourly chart
There are still few more indications to suggest a bearish move. MACD divergence and diminishing bullish strength are key indications to support the expected bearish sentiment. However, the bullish trendline should be violated to the downside to confirm the bearish wave.
Trajectory of the current trendline compared to the preceding trendline is slanted more towards the horizontal axis. Combined with MACD divergence, it seems there is an impulsive bearish wave in the making.
I will still look for short trade opportunities next week. This is in line with the overall EUR long term forecast as well.
What is your expectation and the trade plan for next week? Share your thoughts in the comments. If you liked this Elliott wave analysis for EURUSD, please share it with your friends.