EURUSD almost down to target, then rebound

Hi Traders,

The EURUSD (now at 1.3700) should bottom at 1.3662-1.3634 and rebound to 1.3740-1.3748 in the short term. Afterwards, the downtrend to 1.30 should resume.


TARGETS:

first down: 1.3662-1.3634
then up to: 1.3740-1.3748

then down again:

likely: 1.3489 - 1.3453
possibly: 1.3266 - 1.3182
maybe: 1.2993 - 1.2967


NOTE:

EURUSD and S&P 500 seem to be correlated lately. They both developed an orthodox top and started a "flat" with an irregular top higher than the orthodox top (wave 2 in green in the weekly chart).

TIMING:

The irregular top at 1.3955 was in perfect synch with the cycle of 20-21 weeks (wave 2 in green in the weekly chart).


ELLIOTT WAVES

The weekly chart shows the orthodox top at 1.3298. The Irregular top brought in the picture the perfect confirmation of "the end of the line": a "throw over" of the upper line of the giant triangle accompanied by an absolute top at 1.3455 (see the weekly chart).

Both the throw over and the irregular top in the "flat" often occur after an extended wave. In this case the extension occurred within wave 3 of a "two-step pattern" (1-2-3).


CANDLESTICKS

Note the reversal "Hammer" in the monthly chart


THE WAVE OSCILLATOR

As expected, the WO didn't deliver any entry point for this short as it wasn't safe enough. It will happen when the next downtrend resumes.


FUNDAMENTALS

The expectation and the subsequent implementation of an impending "European quantitative easing" could be the fundamental reason for this  downtrend.




Monthly chart, click to enlarge

Weekly chart, click to enlarge

 Daily chart, click to enlarge

Wave oscillator applied to the daily chart, click to enlarge

4-hour chart, click to enlarge