Weekly Waves 6 June: EUR/USD, US30 and Bitcoin

Our weekly Elliott Wave analysis reviews the EUR/USD 4 hour chart, the Bitcoin crypto currency 4 hour chart, and the US30 monthly chart.

EUR/USD Bearish Zigzag Testing Key Fibonacci Support

The EUR/USD reached the 23.6% Fibonacci retracement level at 1.0790. But the price action was unable to break above that resistance zone:

1. The EUR/USD bearish bounce indicates that the bullish price swing has completed a 5 wave (orange) pattern within wave A (blue).
2. Price action has made a lower high at the resistance line (orange). This could confirm a bearish ABC (orange) pattern in wave B (blue).
3. A breakout below the support trend line (green) would confirm the bearish breakout (orange arrows) towards the Fibonacci support levels.
4. A bullish bounce at the Fib levels (green arrows) indicates a larger ABC bullish zigzag pattern (blue).
5. The ABC (blue) is probably part of a larger wave W (pink) of a larger WXY in wave 4 (gray).
6. A break below the 61.8% Fibonacci makes the zigzag pattern slightly less likely. A break below the 88.6% makes it very unlikely and a break below the bottom invalidates it.

BTC/USD Critical Breakout Up or Down

Bitcoin (BTC/USD) has reached a key decision zone for a bearish or bullish breakout:

1. The BTC/USD needs a breakout (green arrows) above the 38.2% Fibonacci retracement level, resistance trend lines (orange), and resistance zone (red box) for a bullsh revival.
2. A bearish breakout (orange arrows) below the support lines (green) could indicate a continuation of the downtrend.
3. A bullish scenario is shown by the pink waves indicating a 5 wave pattern (pink) has completed within wave A1 (blue)
4. A bearish scenario is indicated by the gray waves indicating that one more lower low could be expected within wave A2 (blue).
5. Eventually a larger ABC (blue) correction is expected to unfold. The bullish trend would be within a wave b (blue), either now or after a lower low.

US30 Preparing for Large Bearish Correction

The US30 is started to unfold in a bearish pattern, just as we expected months ago:

1. The monthly candles are showing a series of lower lows and lower highs of the monthly candles.
2. The bearish correction stopped at the 23.6% Fibonacci retracement level.
3. This analysis offers 2 main scenarios: 5 waves have been completed (gray) or 5 waves are still going to be completed (blue).
4. In our view, the probability of a bearish pressure is much larger and a bearish correction via an ABC pattern (gray) is much more likely.
5. The bearish correction could retrace as deep as the support zone (blue box) and 61.8% Fibonacci level throughout 2022 and 2023.
6. The resistance zones (red) are key for a bearish bounce or bullish breakout.

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