EURUSD Analysis: Price close to 1.15 amid Italian budget concerns

EURUSD continues downside, overtaken by the bearish rush, to hit a 6-weeks low. Price is now very close to the 1.15 huge support level. With the Italian budget keeping Euro under pressure, will price break below?

The EU does not smile with the 2.4% Italian budget deficit which is above the 2% benchmark set by the group. With Dollar getting more solid upside and the current Italian woes, it seems EURUSD will soon break below the 1.15 support level. Price is already taking out the September support level of 1.1525-30. 1.15 price support level was established in late May and became even more important in late June. It was finally taken out in August. Early September, price came close twice at 1.1525 and 1.1530 before it advanced to 1.18 region. If the current bearish rush is sustained further (which looks much likely), price may be on the way to a new low.

EURUSD: Elliott wave analysis and Important Price Levels

In the last update, we continued the wave count from 1.18-1.1815. It was noted that price was about completing the 4th wave of this wave pattern. The chart below was used.

From the 1.18-1.1815 support zone, the chart above started a new bearish impulse wave. The current bullish recovery looks corrective and was labelled the 4th wave of the decline that started last week. The rally could be limited at/below 1.1655 before the drop to 1.1525 bearish target of the last forecast. Only a strong break above the 1.1720-1.1735 would invalidate this forecast and probably lead price to another retest of the 1.18-1.1815 support zone.

Price continued the bearish move as expected and has now hit the 1.1525 bearish target. The chart below shows the current wave pattern and nearest price levels.

Price is still making out for the 5th wave. At the end of the 5th wave, a 3-wave bullish correction will be expected toward 1.1650 before the bears resume. Currently, price is close to an important 1.15 but there has not been any sign of reversal yet. Price could break below 1.15 easily as it happened twice in August. If 1.15 is taken out, the next important level is 1.13 before 1.11. Price might make a 3-wave correction before the big bearish move to 1.13-1.11.

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