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Buying EUR for a long-term rally? Consider EURNOK

EURNOK was declining for over three years after reaching an all-time traded high at 10.151 in late December 2008. The ultimate low was reached at 7.2490 in August 2012. From there a major recovery developed which we have scrutinized under the Elliott Wave Theory in order to forecast the most probable next future development.

After reaching a rally peak at 8.5416 in early December 2013, EURNOK has entered a medium-term correction phase retracing approximately 38.2% of the previous rally. Correction enfolded in a rectangle shaped pattern, keeping the gains capped at 8.5229-8.5416 (December 2013 & June 2014 peaks) and well supported in the 8.0903-8.0990 area.

Under the Elliott Wave Theory the correction has been specified to be a “Double Three”, composing of two corrective patterns, a Zigzag and a Running flat. The Zigzag has been already completed in June as a wave A. The Running flat is still in progress, waiting for a completion of the waves B & C. We already suspect that wave B might have been completed at 8.4936 on a bearish doji high wave candle. We now see scope for the wave C to bottom out by the Dec12-May13 uptrend line (now at 8.1470) ahead of a fresh rally to beyond the 8.5229-8.5416 cap. Initial measured target is seen at 8.9664. Further out, rally may expand towards 9.3829-9.4663 (measured target - 76.4% retrace of 10.151-7.2490).

For the fundamental reasons supporting the NOK weakness theme, please see also our blogs at:

http://www.tradermade.co.uk/blog-content/rahulkhanna/which-currencies-will-be-worst-affected-current-oil-price-decline

http://www.tradermade.co.uk/blog-content/miroslavamicunkova/how-far-can-oil-continue-falling-can-four-years-uptrend-line-safe-da