EURUSD dropped to 1.135 last week from 1.1485. With the dip looking corrective, will the Euro continue upside? The following give insights based on Elliott wave theory.
December 27, 2018 | AtoZ Markets – EURUSD is trading with a little momentum after the Christmas break. Today, it has rallied slightly from 1.135 to 1.1375 after last week's 140 Pips dip. There are fears of the US government shutdown leading to a stunted market momentum in the coming weeks. Despite the dip, the bulls seems to be on top after price couldn't break below 1.127 support sufficiently. A revisit of 1.1470-80 resistance zone is high and an eventual break away to 1.16 is a big possibility. There are no Economic data scheduled to be released in the Eurozone today. However, the US CB consumer confidence data for November will be released in the New York session today.
Since the late November when Euro hit 1.147 from 1.1215, it has remained within these extremes. It spent about a month in the 1.1215-1.147 range before last week's breakout. The breakout however, was not strong enough to sufficiently break above 1.1470 though it hit a new 6-weeks high at 1.1485. In the latter part of last week, Euro plummeted to 1.135 from 1.1485. The drop looks corrective and it seems price will continue upside if it stays above the 1.127 support. The bullish rally from 1.1215 was expected to be corrective and that is happening exactly. There might be one more bullish push to 1.16 before the next big dip.
EURUSD Elliott Wave Analysis and Important Price Levels
In the last update, after price hit 1.1485, we had two scenarios with each forecasting an upside move after a brief dip. The second scenario suggests ''a deep correction to 1.13-1.135 could happen before the bullish move continues'' and has a bullish target zone of 1.17-1.18. The chart below was used.
This is what is happening exactly. Price has since dropped slightly below 1.135 to complete the 2nd subwave of wave c (circled) of the bullish zigzag pattern from 1.1215. The chart below shows the new update.
More price dip could happen to 1.13 before it returns upside. To maintain this bullish scenario, price is expected to stay above 1.127. A break below 1.127 could see a retest of 1.1215 and an eventual bearish continuation below it. To confirm this bullish scenario, a break above the blue channel and above 1.1485 is needed. Bullish target for this scenario is around 1.17-1.18.
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