FX.co ★ EUR/USD Wave Analysis for November 08, 2012

Wave Analysis:

The development of a wave structure so far has been swift amid the U.S. presidential election. The EUR/USD pair was not able to form wave e in the ascending triangle. As a result it managed to correct itself in terms of the downtrend between 1 and 5 November. Meanwhile, the second break of level of figure 28 led to the whole downtrend, which began from the high of October 31, might be considered as inner 5 wave structure of wave C. if it is so, then the targets for this wave C are in the range from yesterday’s low to 1.2680.

Targets for wave C of Downtrend (if is not completed):

1.2746 – 326.6% of Fibonacci

Targets for Up Wave D or 1 or a of New Uptrend:

1.2818 – 23.6% of Fibonacci
1.2849 – 38.2% of Fibonacci

Summary and Trading Recommendations:

The revise of the wave structure gives reasons to conclude that the current move belongs to wave C, which presumably completes its building. In terms of wave C the descending movement may continue towards 1.2746 and lower, which is corresponding to 323.6% of Fibonacci. After it the up wave D of the downtrend may start its building or the first waves of a new uptrend, which may raise quotes to the levels of 1.2818 and 1.2849, which is corresponding to 23.6% and 38.2% of Fibonacci. The rate is inside a new downtrend. If the pair breaks it, then it indicates that the rate is ready to start building of an up wave.