EURUSD has extended gains to 1.165 as the recovery continues. The following includes EURUSD Elliott wave analysis October 21 update.
October 21, 2019 | AtoZ Markets – The greenback extended its losses on Friday. It lost its ground against all the majors after over 15 months of dominance. EURUSD recovered toward the 1.12 handle on Friday after breaking away from the roof of the channel from 1.088. However, this week, it has retreated a bit with a minor dip to 1.115. The recovery could continue to 1.125 resistance level before a minor dip follows.
The Brexit negotiation was the major market highlight last week. At the end of the EU summit, there was an agreement between the union and the UK concerning Brexit. Although BREXIT negotiation did not affect the Euro significantly, the currency has become stabilized since the beginning of the negotiations. At the same time, the demand for the greenback has dropped following the Fed’s repo operations. On the other hand, the US-China trade relation is going well. China has reiterated that concrete progress is going on with the US. USD will gain back some ground at a point. However, the trigger for that is yet unknown. EURUSD price rally should extend further above 1.12 ahead of the ECB policy statement and press conference on Thursday.
1.11 is now the nearest support level after it was breached to the upside on Friday. Below 1.11 is 1.10-1.094 and 1.088. If the price does not slump below 1.11, it is expected to rally to 1.125 resistance level. In case of a faster move, other resistance levels like 1.141 and 1.152 will stand as the next price targets.
EURUSD Elliott wave analysis October 21 update
In the last update, as the chart below shows, we identified a corrective pattern from 1.088 – a triple zigzag pattern. We expected the pattern to be confirmed by a dip below 1.11 handle.
However, it stays clearly above 1.11 and away from the boundary of the triple zigzag channel. If the recovery continues above 1.12 as expected, a bullish impulse wave could be emerging from 1.088. The chart below shows the EURUSD Elliott wave analysis October 21 update.
A bullish impulse wave is now looking more likely. The price is breaking away from the wave (i)-(ii) channel to complete wave (iii). Unless a fast dip below 1.1065 happens, this currency pair should climb toward the 1.13 handle.