Aleksandar Vichev
EWM Interactive
Almost two months ago, on February 21st, we said that brent oil is likely to get more expensive, but needs a downside correction first. We thought so, because there was a nicely-looking five-wave impulse to the upside on the 4-hour chart. The Elliott Wave Principle postulates, that there should be a three-wave retracement after every impulse. That is only the reason why our forecast looked like this:
As visible, we assumed brent was in wave B of an A-B-C zig-zag correction. So, wave C to the south was needed before the bulls could return. As the next chart demonstrates, the price of brent oil developed as a textbook example of the basic 5-3 wave cycle.
Wave C led prices as low as $52.50, which is precisely where the 61.8% Fibonacci level lies. Then the bulls came back and took the wheel. Yesterday, brent oil almost reached the $65 mark, thus making a new top, above the one left by wave 5 at $63. In terms of the Wave Principle, this is the minimum requirement for a successful forecast. However, if we stick to the big picture outlook, we will see there is room for much higher levels.
Trading financial instruments entails a great degree of uncertainty and a variety of risks. EMW Interactive’s materials and market analysis are provided for educational purposes only. As such, their main purpose is to illustrate how the Elliott Wave Principle can be applied to predict movements in the financial markets. As a perfectly accurate method for technical analysis does not exist, the Elliott Wave Principle is also not flawless. As a result, the company does not take any responsibility for the potential losses our end-user might incur. Simply, any decision to trade or invest, based on the information from this website, is at your own risk.
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