17 July EURUSD Elliott wave analysis

EURUSD went higher yesterday right into an important resistance zone. What should we expect next? The following 17 July EURUSD Elliott wave analysis looks into EURUSD based on Elliott wave theory.

Euro rallied deep into the lower boundary of the 1.1737-1.1794 support zone. Until a bridge above, there is still a possibility of price dropping. In the past updates, we acknowledged that the 4th wave of the bearish impulse wave that dominated this year has completed at 1.185. The drop to 1.15 and the corrective rally that followed up to 1.1794 were sub-waves 1 and 2 of (5) respectively. The 2nd sub-wave is looking overstretched and taking more time than usual. It calls for an alternative view which we will look at shortly. Before that, let’s review the last update where the chart below was used.

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.

17 July EURUSD Elliott wave analysis: alternative view

Given that price has been contained between 1.185 and 1.15 since May/June with more than two corrective structures in-between, we might be having a triangle 4th wave. This means that price might continue sideways in a narrower way than we had in the last six weeks. Unless a strong breakout of any of these extreme price levels, we should expect this scenario to play out. Once all the legs are complete, a big bearish move should follow up to 1.11. In the coming updates, we will be looking at the sub-waves and the intraday forecast and opportunities. Stay tuned.

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