want to take a little time this AM to describe the set up coming in on the EURGBP:
- from the all time high, we are coming up into the .618 retracement along w/ the AB=CD projection
there is a lot of thrust coming into this level – but if we break it down into a lower time frame compression we have a very balanced move in form, proportion and balance:
- fundamental frequency: think of a rock hitting the water. how high, how heavy and how high all take into account the depth of the rocks penetration into the water and the corresponding waves which will be produced. to calculate the fundamental frequency targets we use the initial impulse high and low and we get targets (shown by dashed red and purple lines) of .80378 and .86847.
- Note the purple dashed line target when it was hit at 3. Caused big resistance.
- Also, if we PROJECT the initial move labeled 1 and multiply it’s length by PI (3.142) we get right into .87386.
- I am showing a 1,2,3,4,5 (big numbers) and also showing minor 1,2,3,4,5 in the 5th leg.
- also, note the symmetry of the moves shown by big wave 3=5 and minor 1=5.
- Last, a 1.27 extension of the last swing into the .618 retracement.
also, believe this is a countertrend move .. either a wave B or 2 correction coming.
THESIS: short EUR vs GBP in/around 8707-8746. risk 50 pips …normal corrections have been roughly 400-500 pips. Thus a RR of 8:1 or 10:1.