EURUSD - possible near end of wave 5Looking at the chart of the euro futures contracts we may spot a possible Elliott Wave Pattern labeled as 1 to 5. It is a potential impulse wave that may soon come to an end. The theoretical resistance for wave 5 is set by 161,8 Fibonacci expansion of wave 1 placed at the end of wave 4.
If this area is defended the market may retrace back as potential wave A in a larger corrective movement. Then the first theoretical target may be located at the lower limit within the channel or even at the low of wave 4.
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Daniel Kostecki, Chief Analyst Conotoxia Ltd.
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6E1! trade ideas
Feeding Frenzy 8 AMThis pattern first started once a week in November and has slowly developed into every other day, retail longs on the extended Euro Dollar have been pumping liquidity to short sellers. The following day usually has a nice pump and the lower lows and higher highs as the "uptrend" continues. Now that stimulus has passed I believe that more big sellers will begin to step into the market and price will correct on EURUSD. I noticed this pattern when looking at OBV and the negative divergence shows that this floating to higher prices can only go on for so long before someone hits the kill switch. Something else to note is the correlation between the S&P 500 and the DXY index. They are inverse, and all that it might take for a correction of the Euro Futures is bad week for the S&P.
TRADE IDEA: /6E JANUARY 8TH 1.195/1.2 LONG PUT VERTICALMetrics:
Max Profit: 337.50
Max Loss: 287.50
Break Even: 1.1977
Notes: A bearish assumption directional shot at resistance. Alternatively, FXE January 15th 111/113 long put vertical, 1.05 max profit, .95 debit/max loss, break even 112.05 vs. 112.13 spot (although it's trading above that pre-market).