22.01.201910:35 Forex Analysis & Reviews: EUR/USD: Third wave to deliver new low

The market has been declining since an upward impulse in wave (A) finished. Previously, we had a large zigzag in wave ((W)). Considering there's a downward five-wave price movement form the last high in wave A, wave (B) is likely going to take the form of a zigzag. If correct, we're going to have the rest of wave C of (B) soon.

Thus, after a short break, the price is likely going to continue declining. The primary target for the current correction is the 0.786 retracement level of wave (A) at 1.0813. The subsequent pullback from this level could lead to another bullish wave. Therefore, because of the five-wave price movement in wave (A), there'll be a moment for an upward impulse wave when wave (B) ends.

As you can see on the 10H chart, there're a bearish impulse in wave A and an upward zigzag in wave B. Also, we've got here a possible leading diagonal pattern, which is likely the first wave of wave C. If so, the last upward price movement is wave ((ii)) and there's an opportunity to have the third wave of wave C in the coming days.

Let's have a look at the one-hour chart. Wave ((ii)) has finished as a zigzag with an expanding ending diagonal in wave (c). A pullback from the upper side of this pattern led to the current decline, which is likely wave (i). This bearish impulse is about to end because we need to have just a few more waves to consider wave (i) as completed.

Simply put, the successful ending of an impulse in wave (i) will confirm the main bearish story. However, we should be careful until wave (ii) arrives. Anyway, there's a green light for a bearish impulse in wave ((iii)) of C, so the low of wave ((i)) is going to be broken in the short term.