FOREX PRO WEEKLY, February 26-02, 2018

The overlapping wave structure from 1.2255 signals the five-wave decline from 1.2556 is at or near an end.

If the Euro will stage a rally attempt..
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The preferred count labels a completed decline from the 1.2556 top forming wave C of our flat we discussed during the weekend. As Venelin said, yesterday bottom is close to common targets for a typical fourth wave pullback (the 38% Fibonacci retracement of preceding wave 3), and ended exactly at the low of previous fourth wave at one lesser degree.

Pulling back towards 1.2154 favor complete five waves up are in place for wave 1 (or wave A in case of a major correction). In this case wave 2 correction is unfolding toward 50-62% retracement level at 1.222 - 1.22 area, exactly as FreddyFX noted. Expect a new rally from there poking above 1.23, offering a good risk/revard ratio for trading.

My focus is on higher in the early stages of a bull trend unfolding off the 1.2154 low but be warned: at this stage any drop below 1.2154 would negate my bullish view and could turn this decline from 1.2556 to a so called 1-2-1-2 bearish count (see the Ending Diagonal section in my weekend post). Only a corrective three wave drop would add credence to my bullish view followed by a new advance breaching major resistance at 1.2355.

Use 1.2154 as working support for initial stage of this bullish revcersal.

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I expect big volatility in today’s session- there are very big options expiries in euro, just before Italian elections weekend!
 
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