Tuesday, July 30, 2013
Elliott wave analysis of EUR/USD - Important top at hand?
We are in the very last part of wave ii from the low at 1.2756. The rally of the 1.2756 low is clearly in three waves and wave c has an overlapping structure, which indicates it's an ending diagonal. This ending diagonal could be over with the test of 1.3297, but I would prefer to see one last spike higher towards 1.3320 before the top is finally in place and the powerful wave iii of 3 lower is to take over for a decline below 1.2756.
Short term a break below 1.3165 will confirm the top and that wave iii lower is developing. However, we are currently looking at a very powerful Trading set-up as we know we will be wrong if we break above the top of wave ii at 1.3415. That might seem far away, but considering the downside potential the risk is very low here. Remember we will never be able to enter a trade without risk. but we will like to make that risk as low as possible and as much in our favor as possible.