Here is an Elliot Wave technical analysis on EUR/USD from JP Morgan (report dated 07 November 2014) where they conclude that while the downtrend remains intact the risk of a bounce has increased significantly.
I’m on a bit of a roll with some Elliot Wave, I posted a technical analysis from Goldman Sachs over the weekend on EUR/USD Elliot Wave also, here: Elliot Wave technical analysis on EUR/USD from Goldman Sachs – wave 5 complete?
I don’t use Elliot Wave myself – but perhaps some of those that do would like to comment on what JPM are seeing here?
More from JPM:
The EUR downtrend remains intact, but the bounce risks have certainly increased significantly
- The EUR bears are still dominating price action in EUR/USD, but even an inexperienced Elliott wave fan can’t deny the obvious 5-wave pattern now showing in the decline from 1.3993.
- The fact that we detected 3 Fib.- projections for a potential 5th wave low between here and the weekly trend line support at 1.2220 (i.e. at 1.2370, at 1.2318 and at 1.2260) adds to the risk that we might just see the final stage of the bear-cycle from 1.3993.
- This implies that a profound rebound (wave B or wave II) could be looming and requires intensified alert management.
Chart 1: EUR/USD – Daily Chart: The clear-cut 5-wave pattern from 1.3993 down inherits an increased bounce risk
- According to the axiom that the trend is your friend we nevertheless see good chances to extend to 1.2220 and maybe even to 1.2042 (2012 low) as long as the market is not breaking above 1.2520 (minor 38.2 %), which would call for a broader recovery to 1.2875 (38.2 % on higher scale).
- Only a decisive hourly close above the latter (i.e. above 1.2995) would constitute a game change in favor of a much broader recovery to 1.3179 (50 % on big scale) and possibly to 1.3609 (76.4 %).
