Weekly Waves 23 May: EUR/USD, GBP/USD and Bitcoin

5 min read

Hi Traders,

Our weekly Elliott Wave analysis reviews the EUR/USD 4 hour chart, the Bitcoin crypto currency weekly chart, and US30 on the weekly chart.

EUR/USD Aiming for 1.10 Bullish Target

The EUR/USD is breaking above the resistance trend lines (dotted orange). Let’s review what this means for the EUR/USD:

  1. The EUR/USD bullish breakout is indicating the end of the current downtrend and the bearish price swing (wave 3 gray). 
  2. A bullish ABC (pink) pattern is expected. This is probably within wave 4 (gray).
  3. The wave A (pink) is expected to aim and stop at a resistance zone around 1.0750-1.08.
  4. A bearish ABC pullback (orange arrows) should take price back down again to the 50-61.8% Fibonacci support zone.
  5. A bullish bounce (green arrows) at the 50-61.8% Fibonacci level should see another bullish swing take price up to the Fibonacci targets as high as 1.10.

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GBP/USD Bearish Wave 3 Completed

The GBP/USD is testing the historical lows and support zone:

  1. The GBP/USD bearish decline has been very impulsive so far. 
  2. The recent candlestick pattern on the weekly chart shows a strong bullish weekly candle. This could indicate that the wave 3 (gray) is completed.
  3. If the wave 4 (gray) has indeed started, then price action could build a lengthy and choppy correction which should usually stay below the 50% Fibonacci level.
  4. A break above the 50-61.8% Fibonacci level makes the bearish wave 4-5 (gray) within wave C (pink) unlikely. In that case, a bullish swing is expected.
  5. After the correction is completed, one more bearish price swing should create a new lower low to complete wave 5 (gray) of wave C (pink).
  6. An ABC (pink) pattern seems to be completing a wave B (yellow) of a larger ABC (yellow).

BTC/USD Approaches the End of Bearish Correction

Bitcoin (BTC/USD) is building a mild bullish correction within a strong downtrend:

  1. The BTC/USD topped out at the all-time-high after building a rising wedge reversal chart pattern (dotted green lines).
  2. Since creating that top, the bearish decline has been strong. The bearish swing seems to be unfolding in 5 waves (orange).
  3. The recent bear flag pattern (dotted blue lines) was probably part of a wave 4 (orange).
  4. The current correction seems to be a wave 4 (green) of a wave 5 (orange) of a larger ABC correction (pink) in wave 4 (gray). 
  5. Keep in mind that the ABC (pink) could be part of a wave W of a larger WXY complex correction.
  6. As long as price action respects the Fibonacci 38.2-50% resistance levels, one more lower low is still expected. After that, a bullish bounce (green arrows) could emerge.
  7. A break above the resistance line (orange) could indicate an immediate uptrend.

Good trading,
Chris Svorcik

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