Technical analysis in the EUR/USD suggests that the price is in a reverse zone. Last week, the EURO direction was bearish. Will the rebound happen? Let’s find out by studying Elliott’s waves. The Elliott Wave theory is a technique to understand market cycles. In the EURO, we are facing a situation of a possible reversal, a long trade of high probability, if and only if, the price validates the change in trend.
Elliott Wave 4-hour temporality analysis
The price is going down, but making a trap, in the 4-hour chart, we are going to focus on three “ABC” waves in green. Wave “C” extended more than expected because the estimated reversal was close to support 1.1072. As the price continued on its way down, a trend reversal at a lower level should happen. According to Elliott’s waves, the price is in that critical reverse zone, the end of the green “C” wave is near. If the price validates the end of the bearish cycle, the EURO is expected to scale up to 1.1180. There is a chance to win 150 pips. How to do it?
Who is the boss of a trader? The price! You cannot allow a technique intended for analysis like Elliott Wave to give you orders. The price action is who gives the signal. The reverse validation point of the EURO is at level 1.1025, where the long trade begins. Target 1.1180, if the price reaches this level, it will be ideal for taking profits and start looking for shorts. Elliott Wave is the market map, and the trader uses it to guide itself.
Keep your feet on the ground
Before taking an entry, do your technical analysis, breathe and make decisions based on the price action. Use your indicators as an aid to understanding the cycles. Manage your risk and achieve your goals. Do not get stuck years losing in your trades. If the strategy you use does not work, look for another. Let’s follow the price action in the EURO and win a lot of pips.
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