EURUSD is resisting further decline below 1.211 as the dollar goes range-bound. The following 15 January EURUSD Elliott wave analysis shares some technical insights.
January 15, 2021 / AtoZ Markets – EURUSD is nearing a bearish week after the bulls shed the late Thursday recovery. The currency pair has been moved largely by the recent Italian political conflict and the price activities of the dollar. The greenback fell on Thursday as the Fed Chair, in a speech, said it won’t be soon that the bank would exit its current QE actions. Rate hikes above zero would also take some time despite the scary inflationary outlook that market participants have been drawing. The dollar was pressured and EURUSD quickly bounced from Thursday’s low to 1.218. However, the market has nearly lost the gain as the pair touched 1.212 in the early hours of the London session on Friday.
President-elect Biden stimulus plan
The dollar fell in the early hours of Friday after President-elect Biden revealed his rescue plan. $1.9 trillion dollars stimulus package with $2,000 payouts was declared. However, the new bumper cash-out would come with a price – possible tax hike. Thursday and Friday Powell-Biden actions dampened the market mood. The risk-off dollar looks forward to benefiting from the current sentiment. However, it has stayed range-bound. A break above 90.6 for the dollar index should be able to force more rally toward the 91 psychology level. EURUSD, on the other hand, has to break below the 1.211 support to force a retest of the 1.206 support. Later today, the market will look forward to the US retail sales data.
15 January EURUSD Elliott wave analysis
The long-term bullish impulse wave pattern from March 2020 is in the final stages. We projected the 5th wave to end at 1.245 (61.8% Fibonacci projection level) in the last update. Currently, as the 15 January EURUSD Elliott wave analysis chart below shows, we can say the dip from 1.2355 is the start of the sub-wave 4 of the 5th wave if the latter has not already ended. We will keep our options open. For now, further decline would most probably ensue.
With wave 4 in sight, a 3-wave dip from 1.2355 is the most likely scenario. Also, the wave 4 dip is emerging into a complex double zigzag pattern that could hit 1.206-1.2050. Meanwhile, as the dollar is expected to resume the bearish trend, EURUSD should climb higher toward the 1.245 target. However, at the intraday degree, a bounce to 1.22 or above before a decline to 1.2050 can happen prior to the wave 5 of (5) surge.