Published 01st November 2018
The EUR/USD currency pair dropped to 1.13. That was the action, which we had a big conviction on during the past few weeks. Right now, there are almost balanced odds regarding the black and the red count. However, the good news is that odds for a drop below 1.13 increased even further due to recent price action.
There is a three-wave sequence to the upside from the mid-August low. Subsequently, another three-wave sequence went from the September recovery high into today’s low. There is no terminal wave structure within the Elliott wave framework that displays this price pattern. Hence, some follow-through to the downside is most likely. It will either happen immediately or after a sideways correction. The immediate case is depicted in black whereas the sideways case is depicted in red.
Sentiment and position readings are getting on their way to become elevated. A sideways correction would neatly fit into the bigger picture by cooling them down a bit. However, the case for that is not strong. The reason is that the readings are not overshooting into extreme territory yet.
Especially the red case has the potential to cause some complications by into a double-three combination. Moreover, the black count could also morph into some ending diagonal structure. The key takeaway is that the direction remains down despite ambiguity regarding the exact path.
The analysis above is a historical abstract of our EUR/USD Premium Analysis. Subscribers can access multiple timeframes, which are not displayed on this page.