EURUSD has stalled a bit this week. Will there be a strong move before the week ends? The following 3 July EURUSD Elliott wave analysis looks at the technical forecast of EURUSD based on Elliott wave theory.
EURUSD should move this week with FOMC meeting on Thursday and NFP on Friday. UP or DOWN, the move will happen. Price completed wave (4) and the 5th wave has been in motion since the middle of last month. Wave 2 of (5) might have completed with a flat pattern in yesterday’s update. After the Flat pattern, price has moved down and up looking prepared to drop as wave 3 of (5) gets along. Recognizing flat patterns in real time is not as simple as other corrective patterns like zigzag and triangles. The reason being that Flat patterns easily morph into a different pattern. Their level of accuracy in real time is much lower than others. In the last update yesterday, we looked at this scenario and an alternative one. The chart below was used in the last update.
Wave 2 of (5) might just be ending with a flat pattern. Flat patterns are sideways patterns with the first two legs as corrective waves and the last leg as a motive wave. This looks like a regular flat pattern. If this holds, we should see wave 3 of (5) taking control soon and price getting below 1.15. This however, may not be the case as we know how price reacts to Flat patterns. More often than not, Flat patterns morph into a different pattern even after completion.
We will dwell on this scenario and ignore the other for a while until price invalidates one for the other. The scenario above spotted a flat wave 2 of (5) and price was expected to start a new impulse wave down below 1.15. What happened afterwards and what should we expect next?
3 July EURUSD Elliott wave analysis: what next?
This wave count is still valid until price breaks above 1.169. A break below 1.159 could confirm the bearish move down to 1.15 and below while a break above 1.169 could make for a much higher bullish correction or even a change of trend. We should also remember that wave 1 of (5) (a diagonal pattern) which ended at 1.15 could also serve as the end of the 5th wave supporting a strong bullish move above 1.185 resistance. There are high impact events coming later this week that will most likely define the next direction. We will follow up price moves closely before and after the events. Stay tuned for the next update.
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