Euro sees contracting triangle in progress: Elliott Wave

EUR/USD accelerated to the upside in the last few hours from the lower side of a trading range. As such, with the latest time we see triangle as the best labeling in wave four, but we still need wave (e) before pattern is complete. Ideal support zone for end of wave (e) comes in at 1.3490-1.3510 region. If we are correct then we will see more impulsive ride on the euro in this week.

EUR/USD 1h Elliott Wave Analysis

Triangle Elliott Wave Pattern.

Triangle Pattern is a common 5 wave patterns. Generally Triangle is labeled A-B-C-D-E that moves in counter-trend. Triangle is corrective in nature. Mostly triangles move within two channel lines drawn from waves A to C, and from waves B to D.

In Elliott Wave Patterns, a Triangle is either contracting or expanding depending on whether the channel lines are converging or expanding.

If the channel lines are converging, then the Triangle is called Contracting Triangle. And the channels line are expanding then this type of Triangle is called Expanding Triangle.

Triangles are overlapping five wave affairs that subdivide 3-3-3-3-3.

Contracting triangle

  • Contracting Triangle has 3-3-3-3-3 wave structure.
  • Each subwave of a triangle is usualy a zig-zag
  • Wave E must end in the price territory of wave A
  • One subwave of a triangle usually has a much more complex structure than others subwaves
  • Contracting Triangle appears in;
    • Wave four in an impulse wave
    • Wave B in an A-B-C Correction
    • Wave X or wave Y in a double threes
    • Wave X or wave Z in a triple threes
About the Author

Gregor Horvat, based in Slovenia, has been in the forex markets since 2003. He is a technical analyst and individual trader who has worked for Capital Forex Group and TheLFB.com. He also is founder of forex services on www.ew-forecast.com. EW-Forecast.com provides technical analysis of the financial markets, highlighting behavioral patterns based on the Elliott Wave Principle (EWP). Website: http://www.ew-forecast.com/

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