Majority of Elliott wave practitioners believe trend is only in 5 waves and correction in 3 waves. We believe that assumption is wrong and a market can trend in both 5 and 3 swing sequences. In this video, we take a look at the example of NZDUSD and prove how the instrument has been trending higher in a corrective swing sequence (3, 7 , 11) since 8.24.2015 low. We can already count big 3 swings completed from 8.24.2015 low and 7 swings completed also from 1.20.2016 low but from 5.30.2016 low, pair is only showing 5 swings and hence missing 1 more swing to complete 7 swings from 5.30.2016 low and a perfect 7-7-7 Elliott wave swing sequence from 8.24.2015 low. As pair is already in the extreme area from 8.24.2015 and 1.20.2016 lows, we know a big break lower in US Dollar won’t happen from current levels. At the same time. we can’t buy US Dollar because as far as pivot at 7.20.2016 low is holding, pair is still calling for another high to complete a perfect 7-7-7 sequence from 8.24.2015 low. Afterwards, pair could make a larger 3 wave pull back to correct the entire cycle from 8.24.2015 low or correct only the cycle from 1.20.2016 low and then do another extension higher to become some sort of a diagonal structure from the lows.
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