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Possible Cup and Handle formation

31 October 2016, EUR/USD

Possible Cup and Handle formation

Wave Analysis

Earlier the previous trading day, the pair rose from $1.089 towards $1.097. The current chart set up and structure signs of a possible cup and handle formation. With the zone 1.08906-1.08689 acting as the bottom of the cup, we are waiting for a handle formation, that is a possible correction of the motive wave (3) towards 1.0944 to buy the impulsive wave (5). Any clear developments below the end of wave (1) will invalidate the anticipated upward rally and could lead to a possible bearish price movements towards 1.0890. We hope to trade this pair alongside USD/CHF and USD/JPY. These pairs have a strong negative correlation of up -86% and will have an exact opposite price action during this intraday.
Trade Recommendations:
Conservative traders should wait for minor corrections towards $1.0944 to go long with an ideal target at 1.1037
Graham Osano
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