EURUSD has been dragged below 1.1 again and now heading toward 1.092 low. The following technical analysis is based on the Elliott wave theory.
September 23, 2019 | AtoZ Markets – The Euro-dollar ended last week bearish around 1.1 after the Fed hawkish statements pushed the Dollar to gain against other currencies. Price never hit the 1.092 last week low. This week, the pair started around 1.102 and was sideways throughout the Asian session. Early in the London session, the Euro-zone PMIs came disappointing and EURUSD slumped below 1.099 to hit 1.096. The volatility might increase if the ECB president says something out of the expectations later today.
Today’s PMI data dragged the price down and thus further highlighted the unhealthy nature of the Euro-zone economy. All the PMI data from Germany and France came negative thereby enabling the bears to drag the price further downside. The bullish correction that hit 1.1075 and expected toward 1.14 is now under a big threat. It now remains to be seen whether the ECB President’s speech today will carry any weight. The bank is finding it more difficult to revive the zone from its woes. If the US-EU tariff war begins as feared, this currency pair may drop even more.
EURUSD analysis: important price levels
Resistance Levels: EURUSD couldn’t break above the 1.1075 intraday resistance level. It rather dropped below 1.099. The near important resistance levels now remain at 1.1075-1.11, 1.125 and 1.14
Support Levels: The price is now getting closer to the 1.092 support level after dropping below 1.099. If the price drops below 1.092, a free fall to 1.05 is very much likely.
EURUSD Elliott wave analysis
Since the long term bearish impulse wave was presumed to have ended at 1.092, the bullish momentum has not been strong enough to cause a significant breakout above 1.11. Throughout this month so day, the price has remained sideways between 1.11 and 1.092. In the last update, we had two possible scenarios presented with the chart below.
We expected a break above 1.1075 to trigger a bullish continuation to 1.125. However, a dip back to 1.11 was expected to lead to a longer and more complex wave 2 (circled) below 1.092. The second scenario is now playing out as the chart below shows.
Price has dropped but the bullish correction is looking less likely to advance. If a fast break above 1.11 happens, we will have an expectation of 1.125 and 1.14. However, if the price continues between 1.11 and 1.092, a triangle pattern might complete which will most likely lead to a break below 1.092 and off to 1.05.