Weekly Waves 30 August: EUR/USD, GBP/USD and Bitcoin

EUR/USD Retracement Towards 1.05 and 1.08

The EUR/USD made a new low but price action was finally weaker, which is a first indication that a larger bullish retracement could take place:

1. The EUR/USD bullish divergence has appeared between the two recent daily bottoms (green lines on price chart and MACD).
2. The divergence pattern indicates a potential bullish reversal or retracement.
3. Because price action is probably in wave 3 (gray), we expect a shallow and choppy correction within wave 4 (gray) and not a larger reversal.
4. An ABC (yellow) pattern could unfold within a larger wave A (pink) of wave 4 (gray).
5. The bullish targets are the 23.6% Fibonacci retracement level near 1.0450 and 38.2% Fib near 1.08 of the wave 4 (gray).
6. The downtrend within wave 5 (gray) could aim at 0.9750, 0.95, and 0.925.

GBP/USD Bullish Pullback to 1.2250

The GBP/USD is showing a massive bearish impulse but a strong support zone (blue) is now in its way:

1. The GBP/USD is expected to build a bullish retracement, just like the EUR/USD.
2. Considering the strong bearish momentum, we estimate that price action is probably in a wave 3 (orange).
3. This remains valid as long as the bullish retracement is not very impulsive and does not break above 1.25 and especially above 1.28 and 1.30.
4. A bullish ABC (green) is expected to complete the wave 4 (orange) around 1.2250.
5. The downtrend within wave 5 (orange) of wave 3 (yellow) could take price to 1.15 and perhaps 1.14 and 1.1250.

BTC/USD Bullish Bounce Aims at $30k

Bitcoin (BTC/USD) is testing the previous bottom and the main question will be whether price action will bounce or break:

1. BTC/USD is expected to make a bullish bounce according to our Elliott Wave analysis.
2. The current bearish price action is probably a wave B (orange).
3. This means that a bullish bounce should take price higher within a wave C (orange).
4. A larger ABC (orange) should complete a larger wave W (yellow) of a WXY complex correction (yellow).
5. The main bullish target is the 23.6% Fibonacci level around $30k.
6. A bearish bounce is expected at this strong resistance zone (red box).
7. After a bearish retracement in wave X (yellow), a bullish bounce should take price up towards the 38.2% Fibonacci level in a wave Y (yellow).

Good trading,

Chris Svorcik

The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter