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Contributors Top Trade Idea For November 14th, 2013 – EUR/USD

As showed in the chart that comes with this analysis there is a clear three waves move the eurusd did from the 1.38 area to the 1.33 level and this move is a zigzag. Because of that, we are looking at the whole picture to be a leg of a contracting triangle of a bigger degree, hence a corrective wave lower now.

Starting with the end of the abc purple there to the downside, with a fifth wave failure for wave c purple, price made a nice recovery with another abc but this time of a lower degree and this seems to be a zigzag to the upside, yet again a three waves move.

However, the move that followed is a contracting triangle and it should act as a continuation pattern for the c wave red to the upside, a five wave structure that should come in the form of a n impulsive move or an ending diagonal.

Screen shot 2013-11-14 at 11.12.49 AM

Our idea here is to stay on the long side until the five waves structure should complete in the 1.3550-1.3570 area and this should be invalidated by a move lower into the 1.3320.

By the time the 1.3550 comes, shorting the pair would be the wave to go as, again, the move is corrective and should correct some more for the bigger degree leg of a triangle to complete.

Shorting the pair in the 1.3550-1.3570 area should come with a stop loss above 1.3685 and a target to the downside below 1.33 as the lows should be broken.

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