Today is Fri, August 18, 2017 4:58:13 GMT
RSS Follow Us Follow us on Twitter Friend us on Facebook
Contributors Top Trade Idea For February 20th, 2014 – EUR/JPY

30

Bullish setup for the eurjpy pair as we are looking at a possible b wave to the upside (meaning it will have a corrective structure) and this b wave is mandatory to go the 61.8% level, basically to values more than the 142.20 area.

            The reason for that is the fact that price is coming after a complex corrective wave (we are saying this is a triple zigzag for wave a green but it could very well fit into a triple combination scenario) and it means it is yet another three waves structure.

            The thing is that the move prior to the triple zigzag is a classical impulsive move with a third wave extension (meaning the third wave is extended more than 161.8% when compared with the next longest wave out of the motive waves there) but on bigger time frames the whole move to the upside in the 145 area to be only the first wave (pink in this case) of a first wave extension impulsive move.

            This is important as first wave extensions have the most time consuming in the second wave, the one we are in, and this is why we measured the time there in the chart above. Whenever possible to incorporate the time element into an analysis think that you have a competitive advantage in front of the market.

            Usually in such a situation the second wave will form a type of a flat, in the structure a-b-c, and most of the times this flat is an irregular one. This means highs in the previous wave a (basically the end of wave 1 pink) should be revisited in a corrective manner.

            We are saying the level price is now in the 140.30 area is the beginning of a c wave purple after the irregular flat of a lower degree and normally it should be a five wave structure, an impulsive move.

            In plain English, staying long until the 61.8% retracement in the 142.20 area comes is the logical thing to do and, more importantly look for consolidation there for price to try to take the previous highs. The invalidation of this scenario will be a move below 138.60

Recent posts by forexnews