EURUSD - Wyckoff schematic forming

As per the last Wyckoff posts on NZDUSD - the software we use to plot the Elliott waves show a drop from the top of leg 3 down to a 4 on the weekly timeframe.

This is further supported by the level of exhaustion seen on DXY. It now needs to breathe, looking at the structural setup of the Wyckoff schematics we can see that we have had the PSY followed by the BC which also happened within a daily order block level.

Usually, at highs and lows (exits from zones) we also expect to see a drop or rise from the zone and a retest up to the level. This is where EURUSD is currently in the daily structure.

Overall I am looking for the price to pop up a little and test the Imbalance and order blocks on lower TF's - that tags the OB level on the daily which is the retest. Then a drop down to give DXY strength and complete leg 4 of the EU weekly Elliott pattern.

This week COT data shows leveraged funds have added 3,500+ shorts to their Euro positions - although Long overall, it supports a drop to 4 and up to 5 in coming weeks. Oanda sentiment has a 61.8% net long Euro & as we all know 70%+ of retail traders lose money.

I have added our swing indicator, Quadratics and Stochastic falsebar - just to show the current situation on the Oscillators.

Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.