EURUSD is bouncing off a major intraday support zone. Will the recovery continue toward 1.125? The following EURUSD Elliott wave analysis October 28 update looks at what could happen next.
October 28, 2019 | AtoZ Markets – The Euro-dollar currency pair dropped below 1.11 after last week’s ECB monetary policy reports and press conference. Rates were unchanged but the bank warned that the tough time is not yet over. EURUSD dropped below 1.11 shortly afterwards. However, the bulls are holding a strong ground just above 1.1060. Prior to the ECB, EURUSD was on a bullish run from 1.088 at the start of this month as a result of a weakened Dollar. It almost hit 1.118 after three weeks. It seems if the price remains above 1.106, the recovery will have a good chance to continue toward 1.12-1.125 significant levels. A dip below 1.1060, on the other hand, will set the pair back on the bearish path.
There are no important events today in the Forex market except the parliamentary votes on Brexit. After last week’s mixed outcomes, the UK parliament will decide today whether to hold a snap general election or not. At the time of writing, EURUSD was trading at 1.1095. Just as we saw last week, today’s vote will most likely have little or no effect on this currency pair. The market will look forward to the FOMC and the US employment data coming later this week.
EURUSD Elliott wave analysis October 28 update
In the last update, we had two scenarios in mind. From 1.088, EURUSD completed a double zigzag corrective pattern at 1.1179. It fell thereafter into the 1.106-1.111 zone. Alternatively, an impulse wave could be emerging toward 1.125. In the last update, we used different charts to illustrate the two scenarios. Let’s update them. The two scenarios below illustrate the EURUSD Elliott wave analysis October 28 update.
The chart above suggests a bullish impulse wave is emerging. The dip from 1.1179 has been labelled as the wave iv of (iii). If the support zone above 1.106 holds and the price breaks above the wave iv channel, EURUSD should climb higher to 1.125 and 1.13. If the price breaches below the support zone before wave iv channel breakout, the second scenario below suggests that price will fall lower.
The long term trend is still bearish. The rally from 1.088 completed a double zigzag corrective pattern at 1.1179. If the current dip continues below 1.106, we will expect the EURUSD price to fall lower to 1.088 or below.