After a long consolidation, the EUR/USD has woken up, this week it made a bullish swing from the 1.0766 support to the 1.1008 resistance. The 239 pips swing is not over, and there is an option to jump into the trend. Either to add to a previous trade or to start a new trade. In this article, I will guide you step-by-step from an educational perspective to find the way to get in the bullish trade. Using the Elliott Wave theory, we name each price cycle to have a detailed inventory of the past and create high probability future scenarios.
Elliott Wave Analysis
During the pandemic, the EURO is behaving sideways, hoping it will soon be over to enter the big short. We are still not at the right level to sell, and this will happen around 61.8% (1.1167) Fibonacci resistance. In the meantime, the plan is to buy to jump into the bullish trend. At this moment, we are in the cycle of the fourth wave denoted by a circle in red. This wave is active, and we need to see the price fall this week to the 1.0920 support.
Looking for the end of the fourth wave
Once the price completes the fourth wave, in the area of 1.0920 support where the previous wave four ended, we need to use the entire technical arsenal to find the change in trend and go long. I have this trade planned for next week. The first target of the trade is the high 1.1010, and if it manages to break it, we will go to 1.1167. Depending on the volatility, we will be able to keep the position open or enter and exit several times if the market is turbulent.
Elliott Wave Chart – 4 Hours Time Frame
Trade management and final advice
Trade management is the mainstay of all the techniques we apply in the charts to make the trade. Don’t forget to repeat my mantra, small losses in both % and pips, and extended gains. Use the waves to improve your trading and everything you do in your trading always with the best attitude and energy to enjoy the road to success.