A volatile week for EUR/USD
EUR/USD managed to produce a measly net move of 24 pips for the whole of last week. Clearly the market failed to show a directional bias. But the volatility was off the hooks, mostly towards the end of the week. So there were sharp intraday movements to both sides. With NFP on Friday, we saw the market soar and dip within just a couple of days. Although the total range for the week was approx. 130 pips, surely plenty of intraday traders must have been at the edge of their seats, specially on the NFP Friday.
A rangebound sideways market on both higher and lower magnitudes means two things.
- Trade opportunities and trades will be short-lived.
- There is an impulse in the making at least in a lower magnitude.
A corrective structure (more commonly known as a sideways market) is like the calm before the storm, in terms of momentum and net-movement.
With regard to direction, the expectation remains bearish for EUR/USD.
In last weeks forecast (EURUSD Elliott wave analysis) we expected a correction before the wave-A would be completed. However, we also expected wave-A to be complete by last week, which would not be the case. Nevertheless, a delay of an impulsive wave or a sub-wave obviously means more time and opportunity to actually trade the wave.
Zoomed into 4-Hour chart
The price is in the final stages of wave-A. But even then the remaining phase should include further sub-waves as elaborated in the image above. This is the beauty of wave analysis. Wave principle always appreciates and accounts for sub-waves and pullbacks within a wave of a higher magnitude.
Bearish move left within the wave-A is quite limited in the context of higher timeframes such as the Daily or Weekly. However, it could take couple of weeks time for price to reach the red trendline. Specially with wave-4 of a lower magnitude (Intermediate degree) will be due soon. No one can be certain of how deep or how long the corrections will be. But only thing certain is that there will always be corrections within a wave.
The expectation remains the same from last week (and previous forecasts.) That is for EUR/USD price to decline to or below 1.1000 price level. Do you think this is a possibility in the next few days or weeks?