9 July EURUSD Elliott wave analysis

EURUSD gained last week and also opened this week bullish. Will this continue? The following 9 July EURUSD Elliott wave analysis gives technical insights based on Elliott wave theory.

EURUSD has rallied close to 1.18 ahead of the ECB governor speeches today in Brussels. European Parliament Economic and Monetary Affairs Committee continues its meeting today in Brussels where the ECB Governor, Mario Draghi will be expected to testify about the economy, monetary policy, and virtual currencies. His speeches are often used by traders to decipher the interest rate. Will this be the needed trigger for the bearish move we expected or would lead to a further break upside to confirm the start of the large bullish correction?

In the past updates, when price was supported at 1.15, we expected a bullish correction to stay below 1.185 to keep the bearish scenario valid. In the last update, we used the chart below to show the new reversal zone for the bears.

The chart above shows a double zigzag wave 2 which could form within a channel. The reversal zone for this pattern is 1.1737 – 1.1794. If this pattern would be valid, price should reverse at any price in between. If price gets to this zone, reverses and breaks below 1.172, we might see it go further downside and break below 1.15 to head to our 1.11 bearish target. In the other way, if price rallies swiftly above 1.1794, the chances are high that 1.185 resistance will be taken out. If this happens, we should see higher prices at 1.2. Price will soon choose its path. 

9 July EURUSD Elliott wave analysis: what next?

Price has rallied to the reversal zone. This zone seems to be the last chance for the bears to take control again. If price drops below 1.172, we might see a major break below 1.15 down to 1.11 target. The USD is bearish at the moment and only a much weaker EUR would send price downside and one wonders what would make this happen. On the other hand, a rally above 1.1794 could eventually lead to a break above 1.185 as the Dollar probably weakens further. If this happens, we might have already seen the impulse wave ended with a truncated diagonal 5th at 1.15. Stay tuned for the next update.

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