Thinking Out Cloud

Wave 2 is a bow back to volatility had broken or where volatility breaks

Wave 4 is a bow back to beyond E32, a scare on a previous swing high / swing low fractal

B stays within 1-2 STD on the RSI while going beyond E-32 with opposite OS/OB BB location

This was an ABC move up. What next? There was a liquidity grab with the cut above, the bias is down.

Is this ABC a Wave 1 up or would there be a Wave 1 down from here? Another bow back up first?

Ok. Let’s explore the continuation first.

Where would Wave 2 go to given the early definitions?

Just by chance the Goldilocks line is going across that hourly close where the volatility was broken: 0.9678. For a continuation move I would give 40% chance of this playing out.

Taking out the swing low that B made would be an extra liquidity grab (thick red line at 0.9635). For a continuation move I would give 55% change of this playing out.

As it stands, due to the volatility squeeze, it would not take much to break the volatility bands, therefore even a dip below the current swing low (thick green) at 0.9733 would work in combination with the previous swing high close (3rd fractal cyan line) may be a buy. I would give 5% chance for this to be playing out as a continuation move and closer to zero in the absence of Daily Upside Embedding.

If we get a bow back up first especially, we could see a full Wave structure to the downside. This could be yet another 5-wave sequence. I’m afraid the RSI bands are not wide enough for a sideways ABC movement. A typical ABC has similar length A and C legs and the RSI bands are holding cozily at 2 SD.

A Wave 1 down would most likely end after 2 fractal prints outside the 30-sample BB.


I personally don’t think that you are going to see a new lower low unless the whole world becomes unglued.

Frankly, this current move down is a failed Wave 1 attempt, it does not qualify for a Wave A and I do not see how any structure could be started from here without bowing back a little further up to at least .98318 first / outside the upper BB.

Could this start motoring up with a Wave 3 from here? Not without the aforementioned 5% chance single fractal undercut of the thick green.

For the 7th of October, the close should be below FXE92.5 and above FXE89.

Most money lost would be at 91, which translates to .9850+