Euro ripe for correction: Elliott Wave

The euro turned bearish against the U.S. dollar (FOREX:EURUSD) at the start of January from a 1.3900 spike high, which we assume represents the final part of a bullish trend. From there, the market fell sharply lower almost 400 pips, so the pair has completed an ending diagonal. However, a key for a breakdown would be move through the red wave 4) swing low that is placed around the 1.3300 figure, still far away from current levels.

EUR/USD Daily Elliott Wave Analysis

EUR/USD four-hour

As expected, the EUR/USD has turned down from above 1.3700 area where we labeled the end of an expanded flat formation that now shows signs of completion after a sharp fall down to 1.3530. The current decline is showing signs of an impulsive pattern, so we suspect that the EUR/USD is heading south. Trend is down as long as 1.3683 remains in place.

EUR/USD four-hour Elliott Wave Analysis

Elliott Wave Education: Flat Pattern

A Flat is a three-wave pattern labeled A-B-C that generally moves sideways. It is corrective, counter-trend and is a very common Elliott Wave pattern.

Expanded Flat

  • Structure is 3-3-5
  • Wave B moves beyond the start of wave A
  • Wave C ends more substantially beyond the ending level of wave A
  • Appears in wave two or four in an impulse, wave B in an A-B-C, wave X in a double or triple zig-zag, or wave Y 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 He also is founder of forex services on provides technical analysis of the financial markets, highlighting behavioral patterns based on the Elliott Wave Principle (EWP). Website:

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