Sometimes the price moves at high speed which doesn’t allow to analyse or to enter in this market. R.N. Elliott in his Treatise “The Wave Principle” wrote about fast markets. In this post, we’ll talk about speed, and we’ll apply this concept in the EURGBP cross.
Elliott and speedy markets
R.N. Elliott, in his first work “The wave principle” (1936,) commented about fast markets. Elliott said, “it is essential to observe the daily as well as the weekly ranges. Otherwise, the characteristics of importance may be hidden.” In consequence, in fast markets, we must review price action in a lower timeframe to see hidden wave characteristics.
The EURGBP cross is an example of a speedy market. In particular, in the daily chart, we observe the ascending move started on May 06. The bullish cycle began at 0.84882 and currently shows exhaustion signals.
Watching the lower timeframe
As explained by Elliott, the EURGBP 2-hour chart shows more details. In the graph, we observe an ending structure, which is an incomplete ascending movement.
Our short-term analysis for the bullish cycle, makes us suspect that EURGBP is in a potential reversal zone. The area between 0.89306 to 0.89746 could be re-tested before the sell-off. The invalidation level of the upward cycle is at 0.88719. In the mid-term, the potential sell-off should impact at least to the 0.87703 level. (Click the arrowed square to enlarge the chart)
Remember that the price is not forced to move as our outlook proposes. The charts released corresponds to a Technical Analysis application.