EURUSD is rallying today after a depleting Dollar. The following 25 July EURUSD Elliott wave analysis looks at what could happen next based on Elliott wave theory.
EURUSD started this week bearish after the completion of a sideway triangle pattern. This pattern was meant to be the 4th wave of the bearish impulse wave that has lasted through out this year so far. Today, price has rallied a bit, making what might be an intraday bullish correction. If the triangle pattern still holds at the price we had in the last update, we should see a fast move downside. The chart below was used in the last update.
The last leg looks to have completed. We should expect fast decline to 1.13 in the coming days. We will start counting a bearish impulse wave from wave (e) to know how deep the 5th wave would be. This forecast would be invalid at 1.1795.
25 July EURUSD Elliott wave analysis: what next?
From 1.1750, where we perceived wave (e) to have ended, we have started counting a bearish impulse wave. The current rally is just part of it. If the rally goes higher above 1.1750, we will have to adjust wave (e) to the new high in as much as the rally is limited below 1.1795 (above 1.1795, the triangle pattern will be invalid). If price stays below 1.1750 and breaks below 1.165, we would have confirmed wave 1-2 of the new bearish impulse wave. If this happens, price should plunge further below 1.15 support. The bearish target remains at 1.11. Stay tuned for the next update.
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