EURUSD slumped to 1.12 after ECB's 2019 dovish outlook on the EU economy. Ahead of NFP EURUSD price Elliott wave analysis shares useful market insights.
March 08, 2019 | AtoZ Markets - The European Central Bank (ECB) meeting on Thursday ended with a dovish outlook. The bank is taking cautious moves in 2019 after a 'weakening in economic data''. ECB has now cut down its expectations for 2019 and beyond. On the Euro-zone GDP, the bank lowered down its forecast for 2019 and 2020 while also cutting down its inflation forecasts for 2019, 2020 and 2021 citing a 'weaker economic momentum'. The bank will also hold on to the current interest rates 'at least through the end of 2019''.
EURUSD sell-off continued and dropped below 1.1215 (2018 low) to hit 1.12 for the first time in the last 21 months. Price has bounced off to 1.1215 former support early in the European session after a better than expected French industrial production and trade balance albeit a worse than expected German factory orders. Price will most likely oscillate between 1.1235 and 1.12 as the market awaits February employment data from the U.S. Market consensus expects February's Non Farm Payroll to come at 180k, worse than January's 304k while the employment data drops slightly to 3.9% from 4% and the average hourly earnings is expected to increase to 0.3% from 0.1%.
EURUSD Elliott wave analysis and important price levels
After peaking at 1.142 last week, we expected a dip to 1.1215 at least as we counted a bearish impulse wave. The chart below, used in the last update, shows a 5-wave dip expectation.
Price continued downside after a brief visit of 1.1315-1.1335 intra-day resistance zone as expected. The ECB dovish comments triggered further sell-offs to the 1.12 handle. Has the impulse wave completed? Will there be a bigger bounce to retest 1.13-1.135 yet again? The chart below shows the new update.
An impulse wave from 1.142 seems to be on the 5th wave. There is no reversal pattern to signal the start of a 3-wave bullish correction yet and the NFP is coming later. A push to 1.1235 followed by a better than expected NFP would see price crashing below 1.12 to 1.115 and 1.11. Whereas, a break above 1.1235 followed by a worse than expected NFP would see the continuation of a bullish correction to 1.13-1.135. We don't know what the figures will be but these are the most likely scenarios resulting from the outcomes of the NFP coming later today.
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