US-China trade truce is seeing the greenback dropping early in the week. The following give technical insights into EURUSD based on Elliott wave theory.
December 03, 2018 | AtoZ Markets - Prior to the week, the Trump-Xi trade talk in the G20 meeting dominated the market. The meeting ended as both leaders entered into a truce agreement. The dollar is dropping this week across the board. EURUSD started the week above 1.13 and is advancing toward 1.14 to continue the bullish resurgence from 1.1215 after the year long bearish trend ended. The US ISM manufacturing data comes later today while the Brexit debate starts tomorrow. The EU-Italy budget deficit face-off is coming positive. Will the Euro advance further?
On Friday, EURUSD dropped from 1.14 to 1.13 after breaking out of a short-term zigzag pattern that ended at 1.1270. Price holding above 1.1270 meant the continuation of the bull run from 1.1215. The larger bullish correction was expected to aim 1.2 if the correction is not sideways. The nature of the bullish correction has the early form of a complex zigzag - double/triple zigzag. The rally from 1.1215-1.1470 completed a zigzag pattern (probably completing the 1st leg of the larger correction). The dip that followed was deep from 1.1470 to 1.1270 and also completed a zigzag pattern. The move from 1.1270 might also complete another zigzag to 1.15-1.16 as the chart below shows.
EURUSD Elliott Wave Analysis and Important Price Levels
In the previous updates, we expected a dip to 1.135-1.13 before the bullish move from 1.1270 continues. The chart below shows the new update.
The chart above covers the bullish resurgence from 1.1215. The corrective pattern that will complete this journey can't be ascertained now but the early signs show a double or triple zigzag. The idea of a triangle or even a flat can't be ruled out as well. These are the corrective structures that have their first two legs corrective. If price hits 1.15-1.16 as expected, then the idea of a complex zigzag will stand as the only outlook until price shows otherwise. On the current position, a bridge above 1.14 is expected to 1.15-1.16. This bullish scenario will be threatened by a price dip below 1.1270.
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