EURUSD is on its wave downside again after yesterday’s fast rally. Will the decline continue? The following 26 July EURUSD Elliott wave analysis has clues based on Elliott wave theory.
EURUSD completed the 4th wave of a long term bearish impulse wave at 1.1750 with a triangle pattern. Triangles are often seen at the 4th wave of an impulse wave. We expected price to fall far below 1.15. The long term bearish target remains at 1.11 if price moves with our forecasts. Our forecast is still valid. In the last update, yesterday, we expected price to stay below 1.1750 and drop as we started counting a bearish impulse wave leg. The chart below was used in the last update.
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.
26 July EURUSD Elliott wave analysis: what next
The second sub-wave went close to 1.175 before price dropped to 1.165 – wave 1 low. Intraday and short term seller might want to consider a short position once price gets below 1.165. If price goes as expected, the first bearish target to watch out for is around 1.15. Below 1.15, price could plunge further to 1.11 to complete the year-long impulse wave. Stay tuned for the next update.