3 - Crash Sequence & Brexit Volatility vs Wave Patterns
The bearish reversal which started back in February 2018 for EUR/USD has been labeled as a complex three-swings sequence in Cycle Wave X (blue). Its Primary degree sub-waves have been labeled as ABC (red), with Primary A (red) finalizing the sell-off with the middle of August 2018.
Primary B (red) has been labeled as a Double Three structure, with its Intermediate (W)(X)(Y) (turquoise) sub-waves developing under a complex corrective sequence, in which Intermediate (X) (turquoise) presents a Contracting Triangle as the termination point.
The Descending Channel displayed on chart could have an impact on the overall structure in Primary B (red), in the sense that the present sequence could reflect either a Running or Expanding Flat scenario. The upper trend-line would be in focus, as the next swing could determine EUR/USD’s fate for a few months ahead.
In a Running Flat scenario, the EUR/USD could present more weakness ahead and the French elections gap could be the next best interpretation in an attempt for the fill. In this scenario a bearish impulse could commence, and the sell-off could aspire for the lower trend-line of the Descending Channel.
As an alternate scenario, the Expanding Flat would imply a bullish break-out of the Descending Channel’s upper trend-line, and the EUR/USD could commence a sustained bullish impulse.
The preferred scenario and the overall outlook for the EUR/USD within this report would reflect the Expanding Flat structure, in which Intermediate (Y) (turquoise) could be ready to begin a bullish impulse and possibly complete the entire structure.
In both scenarios, the 1.1410 area could reflect as a Point of Interest and the key trigger for the next trend.
A bullish reaction could begin in an impulsive manner, from the 1.1410 and/or 1.1380 area, towards the vibration zone marked between the 1.1940 and/or 1.2100 levels.
Primary B (red) could finalize at or around the 50-61.8% Fibonacci Retracements of Primary A (red), with a possible Head & Shoulders formation.
Primary B (red) has been labeled as a Double Three structure, with its Intermediate (W)(X)(Y) (turquoise) sub-waves developing under a complex corrective sequence, in which Intermediate (X) (turquoise) presents a Contracting Triangle as the termination point.
The Descending Channel displayed on chart could have an impact on the overall structure in Primary B (red), in the sense that the present sequence could reflect either a Running or Expanding Flat scenario. The upper trend-line would be in focus, as the next swing could determine EUR/USD’s fate for a few months ahead.
In a Running Flat scenario, the EUR/USD could present more weakness ahead and the French elections gap could be the next best interpretation in an attempt for the fill. In this scenario a bearish impulse could commence, and the sell-off could aspire for the lower trend-line of the Descending Channel.
As an alternate scenario, the Expanding Flat would imply a bullish break-out of the Descending Channel’s upper trend-line, and the EUR/USD could commence a sustained bullish impulse.
The preferred scenario and the overall outlook for the EUR/USD within this report would reflect the Expanding Flat structure, in which Intermediate (Y) (turquoise) could be ready to begin a bullish impulse and possibly complete the entire structure.
In both scenarios, the 1.1410 area could reflect as a Point of Interest and the key trigger for the next trend.
A bullish reaction could begin in an impulsive manner, from the 1.1410 and/or 1.1380 area, towards the vibration zone marked between the 1.1940 and/or 1.2100 levels.
Primary B (red) could finalize at or around the 50-61.8% Fibonacci Retracements of Primary A (red), with a possible Head & Shoulders formation.
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