November 14, 2018 | AtoZ Markets
EURUSD bullish recovery failed to break above 1.13. The market awaits today's CPI data as price drops below this important level. Will Euro dip further?
EURUSD failed to significantly knock off 1.13 today. The popular currency pair suffers from the recent Italian crises and the current Germany's negative growth rate. UK cabinet convenes to approve the Brexit deal and the US inflation coming later today might weigh in the near-term Euro-dollar direction. Germany's Q3 GDP data missed market expectation at -0.2% whereas the Eurozone GDP remained unchanged.
Euro slipped below 1.13 today after yesterday's 70 Pips rally to close some of the loses from last week. 1.13 is once again acting as an important and significant price level – a resistance this time. In a bearish market, yesterday's dip was expected to be another bounce before the trend continues. Today's 1.13 rejection might have justified that for now. Market now focuses on the inflation data coming from the U.S.
EURUSD Elliott Wave Analysis and Important Price Levels
In the past days, we have been looking at two scenarios of the year long bearish impulse wave. The possibility of an ending diagonal completing around 1.12 is playing out now. 1.12 is now holding as an important support as the chart below shows.
EURUSD: 1st Scenario, H4 chart
This was the first scenario used in the 12th November EURUSD Elliott wave analysis update pointing to a 5th wave diagonal at 1.12. With price looking to stay above 1.12, this scenario might play out. The diagonal (if ending) would be the 5th wave of the year long bearish impulse wave and will be expected to be followed by a big bullish impulse wave above 1.182. This diagonal (if leading) might be the first leg of the 5th wave, especially if the rally that follows is corrective below 1.182. The chart below shows the smaller degree wave pattern needed to validate this forecast.
EURUSD Elliott Wave Analysis, 30 Mins
The bullish scenario is expected to be followed by a strong move above 1.132 up to the diagonal upper line. A 3-wave bullish correction to 1.15-1.16 at least is expected to follow. If price stays below 1.132 and drops further, the second scenario discussed in the last update will play out, with a dip below 1.12. The chart below shows an update to yesterday's forecast supporting more move downside.
EURUSD Elliott Wave Analysis (30 Mins), Second Scenario
If price drops below 1.12 instead, the first scenario will be confirmed. Price will be expected to complete the impulse wave from 1.15, to 1.115. A 3-wave bullish correction might follow to 1.135 afterwards before the bearish trend continues far below 1.10.
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