EURUSD Elliott wave analysis ahead of NFP

EURUSD stays firm below 1.13 despite Thursday's ECB bullish spikes. What should be expected next ahead of today's US employment data?

June 07, 2019 | AtoZ Markets - EURUSD currently trades around 1.126, returning from yesterday's spike to retest 1.13. The European Central bank (ECB) has decided to delay its rate hike till the first half of 2020. This move was a measure by the council to ''act in case of adverse contingencies'' to the 'rising threat of protectionism and vulnerabilities in emerging markets leaving its mark on economic sentiment'' according to ECB president Draghi. Euro quickly jumped by 0.7% to hit 1.13 for the second time in the week.

With price reluctant to break above the 1.13 handle, the Non-farm payroll coming later today will perhaps be the decider. The market expects the employment change for May to come at 177k - far lower than April's 263k. The dollar is under the pressure of a possible rate cut in the near term. Meanwhile, the US labor market has been positive for some time now but there might be a big drop in May. If the deviation between the actual release and the expected release is 50k or more, USD pairs will most likely deflect significantly. 

EURUSD still remains in the bearish trend and the current surge is in the early stages. If the employment favors the USD, this currency pair could return downside to retest 1.111. A big surge above 1.13 will also be seen if the employment data comes negative for the USD.

EURUSD Elliott wave analysis and important price levels

The long term bearish impulse wave that started in January 2018 is ending with an ending diagonal pattern. A 3-wave bullish correction to 1.18 or above is on the cards. The major concern is on the completion of the 5th wave diagonal. In the last update, we had the chart below.
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It seems the 5th wave diagonal is not yet over despite yesterday's surge to retest 1.13. In the past updates, we had another scenario that suggested that the current surge should continue above 1.1375 to invalidate the scenario above and confirm the end of the 5th wave. Currently, there has been a little change to the scenario above.

A dip to 1.12-1.1215 will most likely see wave (v) drop to the 1.105 target. Unless a fast rally above 1.1375 happens, EURUSD remains under bearish pressure. 

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