Hello fellow traders. In this technical blog we’re going to talk about EURAUD forex pair. As our members know, EURAUD has incomplete bullish sequences in February Cycle. Break of March 28th peak has made cycle from the Februay 2017 (1.3593) low incomplete to the upside. The pair is now bullish against the 1.5569 low. Consequently, we advised our members to avoid selling the pair , favoring the long side. Recently the pair has found buyers after completing Elliott Wave Expanded Flat Pattern.In further text we’re going to explain the forecast and Elliott Wave Pattern.
Before we take a look at the real market expample of Expanded Flat, let’s explain the pattern in a few words.
Elliott Wave Expanded Flat is a 3 wave corrective pattern which could often be seen in the market nowadays. Inner subdivision is labeled as A,B,C , with inner 3,3,5 structure. Waves A and B have forms of corrective structures like zigzag, flat, double three or triple three. Third wave C is always 5 waves structure, either motive impulse or ending diagonal pattern. It’s important to notice that in Expanded Flat Pattern wave B completes above the start point of wave A, and wave C ends below the ending point of wave A which makes it Expanded. Wave C of expanded completes usually close to 1.236 Fibonacci extension of A related to B, but sometimes it could go up to 1.618 fibs ext.
At the graphic below, we can see what Expanded Flat structure looks like.
Now, let’s take a look at real market example and see what that pattern looks like.
EURAUD 1 Hour Elliott Wave Analysis 10.19.2018
As we can see on the chart below EURAUD has made price structure that is characteristic for bullish Expanded Flat. Wave ((b)) completed above the start point of wave ((a)), and wave ((c)) ended below the ending point of wave A. We’re already at the extremes area: ((a))-((b)) equal legs and buyers can appear anny moment.
Note: blue box marked on the chart is short term equal legs from the 10/11 peak, wave (i) blue related to (ii) blue, that comes at 1.61008-1.59859. Traders who wants to buy the pair, can use 1.618 FIb extension : 1.59859 as invalidation level. Current view suggests wave (v) of ((c)) of flat might be still in progress and give us more short term weakness .
As we keep saying Flat patterns can get tricky to trade, as sometimes get too extended , when 1.618 fib extension becomes less reliable. Anyway, best instruments to trade are those having incomplete bullish or bearish swings sequences. We put them in Sequence Report and best among them are shown in the Live Trading Room.
EURAUD 1 Hour Elliott Wave Analysis 10.22.2018
Eventually the pair has found buyers at the blue box :1.61008-1.59859. We got nice reaction from that area. As far as the price holds above 1.60409 low, we call pull back completed as Expanded Flat. Now, we would like to see further sepparation from the mentioned low. We need to get break above 10//11 peak ideally to confirm next leg up is in progress.
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