The COVID-19 shakes the markets generating sharp and dangerous movements. The tide is turbulent, and it isn’t straightforward to understand what the price is trying to tell us. Fortunately, we have the Elliott Wave theory to decipher the chaos of the price cycles and have a solid foundation to support the trades. I invite you to dive with me into the price cycles and not miss out on the Elliott Wave plans that we introduce in this article.

Long Term Analysis

The price action links multiple time frames, and the weekly direction is what dictates the primary trend. With this valuable information, it is possible to go up to internal trends by going down in time. In the weekly chart, Elliott’s count shows a downward direction where the price has managed to hit the 1.0777 support, and this swing is called wave “iii” in black. Currently, the fourth wave of the same degree is alive and developing. Its target is in the 1.12 to 1.13 zone. When the fourth wave ends, we expect a new low beyond 1.0777.

Elliott Wave weekly chart

Elliott Wave

Analyzing the internal cycles of the trend

In the four-hour time frame, we will focus on finding the end of the fourth wave, which is going to happen when the three red ABC rising waves end. In the meantime, it is possible to look for an entry. Here at the four-hour time frame, we can see the upward momentum for wave A in red. Five waves in orange show the strength of the upward trend. It will soon end to make a retrace corresponding to wave B in red. Its target is at 1.1100 support, at which point we will be ready to buy the EUR and follow the uptrend.

Four Hour Elliott Wave Chart

Elliott Wave

How to reduce risk in times of high risk?

Trading in these high-risk times should have a conservative approach, especially in size, if a trader is used to risk 2% per trade, at this stage of the market while everything returns to calm, it is necessary to decrease to 1%. We are always taking care of the capital to preserve it in time. We wish you a week full of success in all your trades in the market.