(Part I) EUR/USD Top-Down analysis with Wyckoff and Elliott Wave

12 set 2020

Hi Traders and welcome to this analysis. My name is Shayan and today I will be taking a detailed look at EUR price action vs. USD.

I use Eliott Wave (EW) to better find out our location in the market cycle, and get a sense of possible wave counts,
but my main focus is on Wyckoff based Supply and Demand Analysis

In part 1, today, we will look at the monthly and weekly views to establish the long-term and medium-term trends,
and we will study the daily and 4H PA in a future post in order to create multiple set-ups, so stay tuned!

Let's start with a long term view of the market, starting year 2000:



We can see a clear 5 wave impulse ending with the 2008 market depression. And the 3 wave correction that follows.
As per EW guideline, the correction is bound within a corrective channel, and has traveled to the 0.236 Fib level of the preceding impulse

Let's look at the correction in more details:



There are two themes at play here:

1 - The corrective count: ABC created by a zigzag + a weak ABC (or wave X) before conception of new impulse + holding wave 2 of the preceding impulse
2 - We have hit the long-term target of a long-term classical formation (the apex) and have not been able to commit below this level (the blue ribbon)

Both these themes are constructive and point to higher prices

Now that we have an idea of the possible wave count, let's take a more detailed look using Wyckoff supply and demand analysis: (this is the title chart)



This chart is annotated in sequence, so you can start with number 1 in the left side and follow the price action.
As I mentioned in #7 above, there is a possibility that price resolves lower and created a Backing Up action (BU) at around 1.15 - 1.16. This could confirm the
uptrend continuation or fail and test a lower level.

Our targets are for now previous swing highs at 1.25 and 1.4.
I will also add a PnF based target in the next article to have a more reliable metric for targetting!

So that's it for today. Our long-term and medium-term trends are up, but short-term is not so clear yet. A test of lower levels is possible, or
on a more bullish view, this could lead to a vertical absorption and skip the correction!


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