EURUSD Triangle Thrust before FOMC?

See the notes on the chart for the wave counts we're following. Additional commentary below.

Since the June 4 high, the waves in the EURUSD have become muddied. We wrote about some possibilities the muddied picture presents on June 10 "EURUSD Bears Waking Up". At that point, we were leaning towards a multi-hundred pip sell off.

A sell off did ensue, but not near as deep as expected. With another week's worth of price action, the pair may be carving a triangle pattern (shown above). IF this is correct, prices would soon begin a burst higher while holding above 1.1150. This pattern would target 1.17 area.

As you'll see in the notes, option #2 is simply a more complex version of what we wrote about on June 10. (On the chart, see the tan 'ALT' notes.) In that count, we eventually sell off to 1.09-1.10. It is possible under that scenario to pay a visit to the 1.1375-1.1500 range first, though not required.

So with options #1 and #2 having some overlap on a possible move higher to 1.1375, there is an opportunity to trade to the long side using a stop loss near 1.1145. We are in the midst of a complex correction, so be conservative on trade sizes until the picture clears.

Keep in mind the Daily Wave count "EURUSD Finishes Wave X". Over the medium term, we're still looking for more bullish action in the pair.

With FOMC meeting tomorrow, there is an increased chance of volatility. Again, any trades should be small in nature.

*This is intended for educational purposes on how to identify trading opportunities using Elliott Wave analysis.