EUR/USD – Wave Count and Zig Zag Projection

• 4H: Although the market was bearish for most of the first 2 sessions. The third session this week started pushing up the Euro in the Asian session. This accelerated in the European session.
• This is not surprise ahead of the Non-Farm payroll. We expect some lower volatility but after the current swing.
• Yesterday I suggested a range between 1.26 and 1.28, but the market is clearly not in a flat right now. It appears to me that it is developing a “zig zag” correction pattern.
• The current rally is a strong one, so it should be a 3rd wave of C.
• Looking from the decline since 1.3335 area. the market appears to have completed an impulse wave, and as mentioned, is in a corrective zig zag.
• The current rally can be expected to reach 1.2930/1.2960 area. The 1.2930 is 161.8% expansion of wave A, which is a conventional projection for wave C. The 1.2960 area is 50% retracement of the downswing and is a logical place for the market to hang around ahead of the Non-Farm Payroll.
• Referring to yesterday’s update “Will Volatility Tighten Ahead of Non-Farm Payroll“, yes I believe it will when the market reaches above 1.29. You already see the market expanding the volatility as it tags the upper Bollinger Band.
• After NFP, a break above 1.2960 should suggest a rally towards 1.33 area.

Fan Yang
Currency Analyst
Commodity Trading Advisor

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