EURUSD was bearish last week but now advancing toward a resistance zone. Will price bridge above? The following 16 July EURUSD Elliott wave analysis gives technical insights based on Elliott wave theory.
After completing a zigzag pattern, price rally was resisted at 1.1737–1.1794 and dropped to 1.1610. We expected that the corrective pattern that completed at this zone is the 2nd wave of a wave (5) decline. We have much discussed about the bearish impulse wave that has dominated the year. The 4th wave of this impulse wave was thought to have completed at 1.185. Ultimately, a break above 1.185 will be required to confirm that a large bullish correction has started and the impulse wave was completed at 1.15. Until this happens, the bears would still look more likely to win as price drops back to 1.15 and even below it. The chart below was used in the last update.
The chart above shows price breaking away from resistance reversal zone and looking likely to drop further. If the 4th wave ended at 1.185 and the rally from 1.15 is the 2nd sub-wave of wave (5), then price should drop far below 1.15 and to our bearish target at 1.11. A rally back to the zone could jeopardize the expected bearish move and make a whole different scenario.
16 July EURUSD Elliott wave analysis: what next?
The 5th wave might just resume as price breaks below the wave w-x-y channel. This move should break below 1.15 down to 1.13 and probably below. The bearish scenario above would be valid if price stays below the resistance zone 1.1737-1.1794. Sellers can look for position below sub-wave 1 low at around 1.160 as price looks much likely to break downside. If price stays below the resistance zone and continues sideways within the channel, we might be having a wave (iv) triangle pattern instead. Stay tuned for the next update.
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