Hello fellow traders. In this technical blog we’re going to present you another example of Elliottwave Expanded Flat structure. On the 4th August, $USDCAD broke the 1.3000 low and the day after gave us very sharp rally of approximately 180 pips, breaking the previous high at 1.31475. Most of the traders would characterized this price action as bullish sign, not just because break of 1.31475 high , but also because of the fact that it rallied in 5 waves from the low. However, we assumed that it was rather a bullish trap as there were several signals suggesting so. These kinds of movements are nightmares for some traders who play breakout strategies, but Elliott Wave practitioners are familiar with this pattern and they recognize it as Expanded Flat. We at Elliott Wave Forecast can spot such patterns early by looking at the structure of internal subdivision, looking at price distribution and using market correlation strategies. We explain more about these techniques in Live Analysis Sessions.
The chart below is NY Update from 08/05.2016 suggesting the pair is doing Elliott Wave Flat structure in wave ((x)) connector, expected to complete ideally at 1.31747-1.32311 area, before the decline takes place.
NY Update 8.11.2016 Wave (x)) Expaned flat ended at 1.32008 high and we got nice decline as expected. On 10th August the pair made new low, bounced from short term tech area:1.2996-1.2976, and now ready to continue lower.
If you want to learn more about Elliottwave Flat pattern, check out our previous educational blogs.
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