EURUSD is correcting toward 1.13 after dropping very close to 1.18. The following share technical insights based on Elliott wave theory.
July 15, 2019 | AtoZ Markets - The Euro-dollar currency pair dropped into the 1.12-1.118 support zone last week. However, the bearish momentum couldn't cause a break below to hit what could have been the lowest prices since mid-June. 1.12-1.118 support zone was expected to provide support leading to a corrective bullish bounce. That is what is happening as the most traded currency pair now heads toward 1.13.
At the start of the new week, the price has been a bit sideways. It dropped to 1.126 after advancing to last week highest price of 1.1285. There are no high-impact fundamental events in the economic calendar of the Forex market today. Therefore, the broader market sentiments should prevail. Meanwhile, from the long term perspective, the price is still within the bearish territory. It could return downside toward 1.11 once the current rally is proved to be corrective and contained below 1.14.
EURUSD analysis: important price levels
To the upside, the most important price levels are 1.145, 1.152 and 1.157. However, price should break above the nearest resistance pivot level at 1.1412 to have a chance to make it toward these levels. If the price makes it to 1.157, the larger degree bullish correction is on the way to 1.18-1.21. To the downside, price should break below the 1.12-1.118 support zone once this rally ends corrective. A hit of 1.11 and 1.10 will be next once 1.18 is out of the way.
EURUSD Elliott wave analysis
From the perspective of Elliott wave theory, EURUSD is expected to drop further unless price breaks above 1.1412. In the last update, where the chart below was used, an intraday bearish impulse wave was about to end and a bullish correction was expected to follow from the 1.12-1.118 support zone.
Price moved exactly as expected and now making a bullish run toward 1.13 as the new chart below shows.
The expected bullish correction from 1.119 could continue to the 1.13-1.133 Fibonacci reversal zone or even 1.135. Price should return downside afterwards toward 1.11 and 1.10 handles. A break above 1.1412 otherwise would invalidate this forecast and set the price on a path to the 1.15 territory.