Goldman Sachs: EURUSD Elliot Wave - there is still one last leg lower to complete the 5-wave decline
27 April 2015, 21:11
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"The market came close to testing 1.0911-1.0914 - 76.4% retrace of the Apr. 6th/13th drop and 76.4% of the swing target from Apr. 13th:
- The break opens topside risks to 1.0988-1.10 which includes the full extension from Apr. 13th and the trend across the highs since Mar. 18th.
- While it's still possible that this is wave ii of a v wave from the Apr. 6th high, it's also worth considering whether this is a broader, extended version of a triangle that started in mid-March (perhaps we were pre-mature in chasing the break-out?).
- If this is true, would really need a break below the Mar. 15th/Apr. 13th trendline (triangle support) to confirm that the next leg lower is taking place. This comes in all the way down at 1.0548."
"If this is truly a wider/extended triangle,
then it suits the underlying view that there is still one last leg lower
to complete the 5-wave decline
- Taking
a 1.618 extension target from the May '14 high and projecting it off of
current levels implies that wave 5 could go roughly to ~1.01.
- At the same time, this might also mean that there is room to see further sideways/choppy price action.
- It
is however worth highlighting that the 55-dma is now at 1.0947 and
hasn't been broken (on a daily close basis) since May '14 (at the start
of the downtrend).
- The other
thing to note is that daily oscillators are near to the top of their
recent range (implying potential for an imminent turn)."
