EURUSD ended last week on a bearish note after the U.S employment data came better than expected. Will the bullish move that started mid-August continue to 1.2? How far could price drop before advancing further? The following 10 September 10 September EURUSD Elliott wave analysis has clues.
The year-long bearish trend ended at 1.13 in mid-August and price has not looked back. The bearish move conveniently completed an impulse wave. Impulse wave patterns are chart patterns usually used to measure how far a trend has gone before a correction. A 3-wave bullish correction, which might extend to 1.2, is setting up currently. What should be expected next?
10 September EURUSD Elliott wave analysis : what next?
A 3-wave bullish correction is expected up to 1.2 after the end of the the impulsive wave A at 1.13. The wave analysis above count shows the year-long trend is still bearish. The rally from 1.13 to 1.1735 is impulsive – indicating what could be the first leg of the bullish correction – labelled wave a (circled in red) and the drop from 1.1735 being the second leg – labelled wave b (circled in red). If the drop could continue up to 1.1463 (61.8% Fib-retracement of 1.13-1.1735 rally). The alternative wave count expected an impulse wave rally far above 1.2. The two wave counts suggest the upward direction unless price breaks below 1.13. What are the important levels to watch?
EURUSD: Important price levels
The two most important technical levels are 1.13 support level and 1.1735 resistance level. If price goes above 1.1735, we might see Euro climbing to the 1.2 handle. This scenario is much likely to happen. On the other hand, a break below1.13 would see it down to 1.11-1.10. There is a minor resistance level at 1.166 – a break above could see price head to 1.1735 level. On the downside, the minor support level stands at 1.146 ( a Fibonacci level).