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The EUR / USD is trading at 1.0970 at this time, in August the price suffered a sharp fall, from the high on August 5th, 1.1249 to the low 1.0926 recorded on September 3rd. This addition of bearish momentum indicates that the pair will continue to decline in the coming weeks. In this article, we will see the price action from the Elliott Wave point of view.

The master key to achieve success in trading lies hidden in the past price because patterns repeat themselves, but it is our job as technical analysts to decrypt that past price and forecast the future price. We will not be able to have a 100% effectiveness but enough to win in the financial markets.

The Big Picture

In the weekly chart, we can see five waves in black, an ending diagonal is here, and the third wave is active. It is necessary to see the price fall to the bottom line of the diagonal (denoted in red). Approximately 1.0880 at this support is expected a bounce, to move the price up back tp the upper area of the red channel (1.114), this move up is for the wave “4” (black) the ending diagonal.

Elliott Wave Weekly Chart

What is happening inside the waves?

In the four-hour chart, we can appreciate the sharp fall that the EUR/USD had in recent days, today during the American session the pair bounced creating the first of three waves that are part of the wave “4” (green). When the fourth wave ends, we expect the EURO to continue its downward path this week, reaching support 1.0880. The primary strategy is to wait for the end of wave “4” (green) to sell and follow the trend.

Four Hour Chart Elliott Wave

So far, the price activity does not show buy signals when the weekly wave “iii” (black) ends we can look for long trades, while this event happens everything should be focused on shorts. Do not forget to keep the risk under control and make cold-headed decisions by closing the doors to your emotions. We wish you a week full of successes in your trading.