EURUSD – So far so good
Euro-dollar so far playing according to our long term forecast. Remember the forecast was made long before the Brexit and still stays valid to date. Its not to say that our forecasts are perfect. Because they are not. Forecasts can never be perfect, and there is no saying that the market has to honor anyone’s technical analysis. The markets always do what they want to do. The forecasting is only a method to find an edge in the market, in terms of direction.
Having said that, its amazing what some little knowledge of the wave principal can do, to improve your forecasting and trading as well. If you are not familiar with the Elliott wave principle, I highly encourage you to follow our crash course – the complete guide to Elliott waves.
Here’s the Eurusd forecast from May 2016
So the pull back rally is still a possibility, before the expected bearish impulse. In fact there is more evidence to support a rally (a possible ABC or XYZ.)
The bullish Gartley
A classic Gartley pattern to favor another wave up to continue the correction. If the market goes on to produce a bullish wave, there will be 3 possibilities, of which 2 are marked on the image.
- Reversal at a fib level, without reaching the upper boundary of the structure would mean the reversal bearish move could turn out to be an impulse that violates the current lowest low level.
- If the rally reaches the upper boundary, then the reverse bearish wave could be the D wave of a triangle pattern. This would also mean that wave 2 or the overall correction is still in progress.
- The 3rd possibility is that the price reaches above the upper boundary of the current structure. This would also mean that the correction is still in progress, perhaps on course to create a double ZigZag WXY pattern of a higher magnitude.
Of course these are different scenarios, only if the market does produce a bullish wave. Note that the next big impulse wave is still expected to the down side. Everything else should produce only a prolonged correction.