EURUSD is being resisted at 1.1325 after a bearish technical pattern completed. Will there be a bearish breakout to 1.116?
April 17, 2019. AtoZ Markets – The Euro-dollar rally seems to be slowing down at 1.1325 after two weeks of price advancement. The rally from 1.118 looks corrective and it seems a new bearish wave will follow after a sufficient break below 1.13 and 1.128 intraday support levels. Currently (at the time of this report), EURUSD trades at 1.1295 just a bit below 1.13. There is a big likelihood that a double top will be completed at 1.1325 and then be followed by a break below 1.128.
There is not much today, as far as the economic calendar is concerned. EURUSD slightly broke below the sideway intraday range on Tuesday but today, price entered with a new surge to 1.132. Price is pointing downside again and it remains to be seen whether a true breakout will happen. From a technical analysis perspective, EURUSD is expected to make a new leg toward 1.1175 low and most probably below it.
EURUSD Elliott wave analysis and important price levels
From Elliott wave perspective, EURUSD is completing a bearish impulse wave that has lasted for more than 13 months. The 5th wave started in October 2018 and is completing an ending diagonal which has lasted for more than five months. The 5th leg of the ending diagonal pattern is expected to be a 3-wave dip. The first wave completed at 1.1185 and the second is about completing a double zigzag pattern as the chart below shows.
A double zigzag pattern is completing with a wave w-y in 100% Fibonacci relationship at 1.1328. In addition, price is completing a reversal double top pattern just at the 1.132-1.133 reversal zone. A break below the double top neckline will also result in a break below the double zigzag rising channel. This could be the confirmation for the end of wave x and price will be followed by further dips toward 1.116 important price level. On the other hand, if price holds above 1.128 neckline, we might see rallies to 1.134 before price finally drops. There is also the possibility of a triple top pattern at 1.132-1.133 before the dip. EURUSD is close to completing the corrective rally from 1.1185 and a fall below 1.1175 will most likely follow.
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