Short Term Currency Forecast

Published 18th December 2017

The EURUSD rebounded once more on the blue trend channel support and resistance earlier today. Wave action since December 12th looks like a 5-wave impulse up, which was followed with a 3-wave impulse to the downside. It appears that our black elliott wave count plays out.

Nevertheless, we should not get too comfortable here about the exact path. We are expecting a complex iv° wave. It may have finished on November 7th as our black label shows or extend further. The red count and path is an example of a potential double-three pattern extension. It cannot be ruled out at this point in time. Both versions point to a push into the 1.215-1.225 area or higher however.

Published 14th December 2017

We’ve seen a reversal from close to the 61.8% fibonacci level of wave (i) yesterday. The EURUSD may have therefore ended its (ii) wave with a double zig zag. We would expect to see a swift followthrough to the upside if this is the case.

We still view the light blue upward trend channel as support and resistance for the base case of a new EURUSD high. We do not want to see this support impulsively broken if our black count is correct. Meanwhile the ball remains with the bulls! Our base case currency forecast is at least a push into the 1.215-1.225 area before a significant reversal kicks in.

Medium Term Currency Forecast

Published 9th November 2017 & validated 14th December 2017

The euro may have ended its downward trend, which would be in line with our interpretation of the Dollar Index. This is the case if we are not tracing out a B-Wave right now. Our experience tells us that irregular flats usually retrace up to fibonacci 138.2% of their preceding A wave. Far bigger retracements usually mean that it is not an irregular flat but some other pattern. The September high is exactly at a 138.2% fibonnaci level. This may speak for the black count in the chart below. It would indeed confirm the dollar index.

However, we should not get too comfortable with our outlook and be aware that a new multiyear euro low could also be ahead of us in the coming months. The blue count keeps track of this alternative scenario in the chart below. It is the less preferred version as of end 2017.

In the meantime at least 3 minute degree waves to the downside should be recorded. This has not happened yet at the time we publish this. We’ll watch how the market behaves around key support and resistance levels as well as real time wave structure.

Technical Analysis