EURUSD leverages on a bearish dollar to burst upside on Monday. The following 19 October EURUSD Elliott wave analysis shares some technical insights.
October 19, 2020 / AtoZ Markets – EURUSD is building on the last Friday bullish momentum after gaining 0ver 80 pips since the London session opened on Monday. The currency pair is about 10 pips from 1.18. If the bullish run persists during the American session, we should see further surge above the 1.183 resistance level. Further surge to 1.2 should then follow as we have been expecting in the past EURUSD Elliott wave updates. On the flip side, 1.1612 remains the gateway to the larger bearish correction. However, with a new support level at 1.1688-1.17 about to be confirmed, the northward direction is much more likely in the near term.
EURUSD analysis: last week review
The week is starting on a bright note. The dollar is falling across the board ahead of the New York session. Risk appetite resumed despite Covid 19 resurgence. Above many bank speeches this week, the US presidential debates and campaigns will dominate headlines. Aside these, the market will look up to the US Markit PMI data and the unemployment claims in the last days of the week.
From the technical perspective, a bullish EURUSD was so much high on the cards that our last EURUSD technical analysis pointed at it. The DXY was off to begin a fresh bearish journey as shared in the week ahead in the Forex market. Meanwhile, last week, the chart below shows our expectation on EURUSD.
The long term EURUSD Elliott wave analysis shown above displayed a bullish impulse wave pattern from 1.0623 9started in March 2020). We identified wave 1 of (4) completed with a diagonal pattern. Wave 2 should follow as the chart above suggested. At the end, wave 3 should follow with a bullish push above the high of wave (3) to continue the wave pattern. The new October 19 EURUSD Elliott wave analysis shows this playing out quite perfectly.
19 October EURUSD Elliott wave analysis
Wave 2 ended at 1.1688 with a simple zigzag pattern. If wave 4 has ended at 1.161 and wave 2 of (5) has ended at 1.1688, the price will break above 1.183. Wave 3 should then continue above 1.2 up to 1.2050-1.21. On the other hand, if after the surge above 1.183, EURUSD turns corrective around 1.19-1.195, opinion will be divided as to whether wave (4) would be more complex/deeper or wave (5) would proceed. However, we don’t need to worry about that yet. When price gets there, we shall see what comes next. Therefore, for now, the bulls will hope for a good run