The daily charts of EURUSD show an ideal Wolfe Wave in the making. From the chart below we have points 1 through 4 being formed with current price action 'hopefully' racing towards making a peak at Point 5.
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| EURUSD - Daily Charts, Wolfe Waves |
By using Median line we notice we do not yet have a confirmation towards point 5. A break of the down sloping median line will provide the much needed validation, which is depicted as the shaded area.
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| EURUSD - Wolfe Wave Point 5 - Validation Criteria |
The same validation can also be seen by plotting a median line sloping upwards, connecting Wolfe points 2, 3 and 4. From this median line we would be looking to take a short position as soon as this upward sloping median line is broken, with an early indication coming through when price action starts moving away from the inner median line.
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| EURUSD - Short Trade Set up |
With this trade set up, we take our total count of potential trade set ups to 3. Other analysis can be found here for
USDJPY and
GBPJPY
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