A Clear View? EURGBP Analysis
- Wian Stipp
- Nov 16, 2017
- 2 min read
My favourite pair for a while has been EURGBP. The wave patterns have been easy to follow and trade. I was looking at reversals from certain zones months in advance! I have found that EURGBP also tends to experience very sharp, swift moves; when you can anticipate and catch one of these moves, there's nothing quite like it.
Let's have a look at a weekly chart to see what our options are...
I believe we are in a huge wave (b) triangle. I've excluded the possibility of a flat correction because Primary ((B)) is a triangle as shown on the daily time-frame below. Elliott says that wave 2 cannot be a triangle. Therefore, a three wave move from the high is expected. Let's drop down to the daily time-frame to see the possibilities...
So, there are a few ways that this could go. I am looking at either a triangle or a flat correction for Primary ((B)). It all depends on how this swing to the upside takes place. If it subdivides into three waves and doesn't surpass Intermediate (A), then it's a triangle and wave (D) can be traded in the short term. If the appreciation on EURGBP actually can be clearly counted as a clear 5 and it breaks the high of (A), then it's safe to say we can also expect bearish price action after the pattern completion, since a flat correction has been generated.
Notice in either case, the market is pointing down. This is a great indication of a high probability trade setting up. I would rather it be a flat because that would give us the opportunity to sell from a higher price. Flat corrections also tend to be "cleaner" than triangles, so picking a trade from the top can generally be easier.
I will likely update this pair, or GBPCHF, in a blog post next week to cover any changes to the count or to calculate any potential targets / turning points.
Remember to record the results of each trade you take for review in the future. This is the best tip I could ever give.
댓글