🌊 EUR/USD Triangle Pattern After Completing Bearish ABC 🌊

3 min read

Dear traders,

the EUR/USD made a bearish bounce as expected after breaking above the 21 ema zone. This is a key decision for either one more bearish swing or a bullish bounce.

This article reviews the Elliott Wave patterns and the expected price path of least resistance.

Price Charts and Technical Analysis

The EUR/USD is now moving lower as part of a wave 2 or B (purple). A bearish breakout indicates a deeper price swing where a bullish bounce confirms the end of this swing.

Eventually a bullish swing is expected to take place (green arrows). This will create either a wave 3 or C. Traders can see whether it’s a wave 3 or C depending on the pattern.Β 

  • A bull flag (orange arrow) indicates an immediate break within wave 3
  • A reversal (red arrows) indicates a deeper pullback towards the long-term moving averages within an expanded wave 4’

On the 1 hour chart, we see the price action completed a 5 wave pattern (orange). It was followed by an ABC down and an ABC up.Β 

Now the main levels to watch are the trend lines and 21 ema high and low.Β 

  • A bearish breakout (red arrows) confirms a deeper wave C (orange) within wave 2 or B (purple)
  • A bullish breakout offers 2 scenarios:
    • It can confirm a deeper wave B (orange), which is followed by a 5 wave pattern in wave C (orange)
    • If a bull flag emerges (grey arrow), then an immediate uptrend can start

The bullish outlook is invalidated if price action breaks below the bottom (red circle).

The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter.

Good trading,
Chris Svorcik

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