EURUSD trades slightly below 1.11. The following looks at what could happen next based on the Elliott wave theory.
August 28, 2019 | AtoZ Markets - EURUSD has been pushed below 1.11 but the buyers are beginning to resist further falls to the 1.105-1.1025 critical support zone. On the contrary, the buying interest is lacking enough momentum to make a real push away from the bearish territory. EURUSD has, therefore, stayed around the 1.11 handle for nearly 24 hours. It remains to be seen how this will play out.
The US-China trade conflict continues to dominate the headlines. It's very difficult to imagine that a deal will be happening soon with the latest developments. The Euro-zone economies are having their own tough times thereby offsetting a real huge move for this currency pair. Italy and Germany are fighting with recessions while the Brexit continues to cast shadows. Besides these political and financial occurrences, the economic calendar is a bit light for the rest of the week. The broader market sentiment will continue to focus on what is happening between the two world's biggest economies and the Euro-zone economies before next week huge economic events take away traders' attention temporarily.
EURUSD analysis: important price levels
EURUSD is getting closer to the 1.1050-1.1025 support zone which currently demarcates the buying and selling interests. If the price drop below this zone, we should see 1.10 and if this is triggered by a possible trade agreement of some woes from the Euro-zone, the currency pair will head toward 1.050. To the upside, on the other hand, a breach above the 1.1165 resistance level will buy the bulls more time. We might see a hit of the 1.125 and 1.14 in the medium-term.
EURUSD Elliott wave analysis
EURUSD is currently picking toward the 1.11 handle. The long term Elliott wave forecast suggests the bearish trend ended at 1.1025. However, the bullish correction expected to follow was resisted at 1.125 and has fallen sharply afterwards. In the last update, we used the chart below after price bounced quickly off 1.105 to 1.1165.
The scenario above will be valid if the price should break above 1.1165. We might then count a 5-wave rally to 1.14. However, the minor dip below 1.1165 continued deeper to 1.1082 as the chart below shows.
The dip has gone deeper but the scenario above is still valid and will be triggered with a break above 1.1165. This scenario will become invalid if the price breaches below 1.1050-1.1025 support zone.