EURUSD dropped yesterday after a strong Dollar. The following 18 July EURUSD Elliott wave analysis looks at what could happen next.
EURUSD once again rejected the 1.1737-1.1794 intraday resistance zone. It rather bounced off 1.1737 and faltered. Price is now close to 1.16. In our 16 July update, we expected this to happen. In the last update yesterday, we presented another high likely scenario. The two scenarios are pointing downside. Yesterday’s scenario expected the drop to be limited and stay above 1.15 before another rally to complete a triangle wave(4). The previous update expected the bearish move to break below 1.15 to confirm wave (4) had already ended at 1.185 last month. Let’s review the last update where the chart below was used.
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.
18 July EURUSD Elliott wave analysis: what next?
The chart above shows the d-leg of the triangle about to complete. Triangles, according to Elliott wave theory, have five sub-waves labelled a to e. The Euro could still make one more rally before the final bearish breakout. If the current dip goes below 1.15, we will have to go back to the 16 July forecast. Stay tuned for the next update.
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