As discussed in our latest webinar, Wolfe Waves are a 5-wave pattern which shows supply and demand as price moves towards an equilibrium. In essence, Wolfe Waves rely on three tops and two bottoms or the reverse, pointing to the correct direction, in order to evaluate where the next move is going.

For the NZDCHF pair, points 1 and 3 have been identified as the tops of a potential bearish Wolfe Wave, while points 2 and 4 appear to confirm this formation, given that they satisfy the Wolfe Wave conditions. The two lines extended from points 1-3 and 2-4 respectively converge, once extended, to set the ETA, which is found to be at approximately 19:00 server time tonight. The extension of the line from points 1-4 sets the expected equilibrium price, which is found to be at 0.6873.

However, as Bulkowski points out, the price does not need to touch the EPA line at exactly ETA, while the price can also reach ETA without reaching the EPA level. These known pitfalls of fundamental analysis suggest that traders need to be careful, especially in days where volumes are low, such as today. While the RSI and the MACD, along with the SMA crossing the LMA at 10:00 server time, show signs of bearish behaviour, traders need to follow proper risk management rules in order to minimize their downside.


Disclaimer: Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of purchase or sale of any financial instrument.

Feed news

Latest Forex Analysis

Editors’ Picks

EUR/USD extends gains to 1.1200 on sliding US yields

EUR/USD is trading close to 1.1200, in the wake of the European session as US yields continue falling. The European Parliament elections are in play and US durable goods are eyed.


GBP/USD off the highs as May announces stepping down on June 7th

GBP/USD is trading below 1.2700 after a quick rise to the upside as UK PM Theresa May announced she will step down on June 7th with Boris Johnson set to take over.


USD/JPY hangs near 1-week lows, just below mid-109.00s

The USD held on the defensive despite a goodish bounce in the US bond yields. Escalating US-China trade tensions continue to underpin JPY’s safe-haven demand. Traders now look forward to the US durable goods orders for some fresh impetus.


US Durable Goods Orders Preview: Sentiment is not enough

Durable goods orders expected to drop sharply after a strong March. Business investment thought to cool following the best quarter in nine months. Goods orders ex-transport have slowed despite strong consumer sentiment readings.

Read more

Gold consolidates in a range below weekly tops set on Thursday

Gold held steady through the early European session on Friday and was seen consolidating the overnight strong up-move to weekly tops.

Gold News