Weekly Waves 31 October: EUR/USD, GBP/USD and Bitcoin

EUR/USD Bearish ABC After Bullish Rally

The EUR/USD made a bullish breakout rather than reaching the previous bottom last week as our analysis expected:

1. The EUR/USD bullish breakout above the resistance trend line (dotted orange) sparked a bullish rally.
2. This indicated the end of the wave B (green) and the start of the wave C (green).
3. The bullish ABC (green) has probably completed a wave A (pink) of a larger ABC correction (pink) in wave 4.
4. The wave A (pink) seems completed and the current bearish price swing is expected to start the wave A (green) within wave B (pink).
5. The main target for wave A (green) is the 38.2% Fibonacci level.
6. Later on, price action could drop lower to the deeper Fibonacci levels.

Bitcoin Breaks North of Key Resistance Trend Line

Bitcoin (BTC/USD) was unable to break below the previous bottoms and support zone (green box):

1. BTC/USD made a bullish breakout above the resistance trend line (dotted orange).
2. This breakout confirms the continuation of wave 4 (pink).
3. A bullish ABC (green) pattern is unfolding within that wave 4 (pink).
4. The breakout marks the end of wave B (green) and the start of wave C (green).
5. The wave C (green) could test the previous top and 23.6% Fibonacci level.
6. Price action could go as high as the 38.2% Fibonacci level within wave 4 (pink).
7. A larger bullish retracement, however, would make the bearish Elliott Wave analysis unlikely.

GBP/USD Facing Strong Resistance at 38.2% Fib

The GBP/USD is completing a bullish 5 wave pattern upwards (green):

1. The GBP/USD seems to be losing its bullish momentum at the 38.2% Fib resistance (purple).
2. A last push upward (blue arrow) could complete the rising wedge chart pattern.
3. A bearish breakout (red arrow) below the support (green) line marks the end of the wave 5 (green) of wave A (pink) and the start of the bearish ABC (green) in wave B (pink).
4. The bearish wave A (green) should reach the 38.2% Fibonacci level.
5. The bearish wave C (green) should reach the 50-61.8% Fibonacci level of lower.
6. Once the ABC (green) is completed in wave B (pink), a bullish wave C (pink) should take price action higher again in a larger wave 4.

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