FX.co ★ Wave analysis for EUR/USD on July 20, 2021

EUR/USD, H4 time frame:

The formation of a deep corrective wave 4 has not yet been completed, which means that there is still an opportunity to sell at a higher price.

The development of a bearish impulse wave C, which is part of the active wave (Y), can be observed in the last part of the chart. It is worth noting that wave (Y) is the final part in correction 4, while the impulse wave C is marked with five sub-waves [1]-[2]-[3]-[4]-[5]. It can be noticed that the correction wave [4] is similar to an inclined triangle (A)-(B)-(C)-(D)-(E).

According to Elliott's rules, the price continues to move in the same direction in which it moved before after the completion of the inclined triangle. In this case, market participants may see a price decline in the sub-wave [5] in the near future.

Perhaps, correctional wave 4 will end around the level of 1.1700. This is the previous low, which was marked by the current wave [W].

Based on this information, opening short positions can be considered from the current level in order to take profit at the level of 1.1700.