EURUSD jumped above 1.14 after a weaker than expected November NFP. What are the important price levels for this week? The following give insights based on Elliott wave theory.
December 10, 2018 | AtoZ Markets – USD is weak across the board after a worse than expected non-farm payroll data released on Friday. EURUSD quickly climbed above 1.14 and has remained there throughout the Asian session today. However, this week has started bearish after price lost 40 Pips to trade very close to 1.14. It's looking very likely that price would retest 1.14 and probably break below it.
Since price rallied from 1.1215 in November to hit 1.1470, it has not been able to take a new high. From the long term Elliott wave perspective, price was expected to continue to 1.2 after the year-long bearish impulse wave ended at 1.1215 with an ending diagonal pattern. The rally however, is becoming sideways and might complete a triangle pattern. The triangle pattern seems pre-mature as price will have to complete two or three more legs. Whether we will have a bullish or bearish triangle remains to be seen. In the near-term, a drop back to 1.13 is in the cards unless there is a clear break above 1.1470 resistance level.
EURUSD Elliott Wave Analysis and Important Price Levels
At the juncture, the wave pattern after the rally from 1.1215 to 1.147 is not clear yet. There have been down and up 3-waves legs which means a triangle or flat dip is highly likely. If a flat wave b (circled in red) will play out, we should see a 5-wave dip from 1.144 to hit below 1.13-1.127. If a triangle will emerge, price should stay below 1.147 and move as shown in the chart above. A dip to 1.13-1.127 zone is still very much likely in as much as price stays below 1.147. A break above 1.147 would invalidate the short-term bearish expectation. Wave c (circled in red) should lead to bullish target at 1.155-1.16. Unless a dip below 1.1215, the larger degree wave forecast still points upside.
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