Price in the last 2 decades has been in a real consolidation- no definite trend direction- no definite corrective direction.
With ABC corrective swings interlocking to form larger corrections, there are definite patterns that can give shorter term direction.
From (B) to (C), was a clear impulse wave which probably indicated the end of an expanding flat and from (C), a correction in the manner of a double zigzag pattern.
The correction from (C) is less than 50% of the move from (B) to (C). A double zigzag pattern is often deep, talk of 61.8% retracement and if it's holding, we should see price around 0.87.
A triangle is an alternative pattern but we project a double zigzag as our favourite because of how price is playing out in the lower time frames.
The chart above shows the X leg of the expected double zigzag at 50% of the first leg of the double. We also saw price pulling back to the trendline after breaking it .
Price could hit 0.9374, 0.9234 and 0.8960 on its way down.
The chart below shows the corrective wave pattern formed by the price pull back.
The pullback was a zigzag pattern which is often seen in the X leg of a double zigzag and we saw how price dipped (BREXIT effect) but went back to normalize its movement.
We expect price to be contained below 0.9690, a break above it will signal an early sign of pattern failure though the pattern will be invalid at 0.9763 (Stop loss level)
An impulse wave is expected as the first leg of the Y leg of the double zigzag and price should be expected at 0.9374, 0.9234 and 0.8960 (Targets).
These are the types of pattern you will spot when you learn how to use the Elliott wave theory to trade any market in any time frame.
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