EURUSD Elliott Wave Analysis: Price Approaching 1.15 Ahead of US GDP

EURUSD is approaching 1.15 after breaking above 1.14 easily this week. Ahead of today's US GDP data, what could happen next? The following give insights based on Elliott wave theory.

December 21, 2018 | AtoZ Market-  The Fed hiked rate from 2.25% to 2.5% on Wednesday meeting market expectation. EURUSD in turn, advanced to break above 1.14 and hit 1.1470 resistance level for the first time in four weeks. There were also talks of re-evaluation of monetary policy in 2019. Meanwhile, today, there are two high impact economic data coming from the US. The US GDP data for the last quarter of the year, will be released later today and is expected to increase by 3.5%, unchanged from last quarter's. At the same time, the US core durable goods orders for November is expected at 0.3% against the 0.2% recorded in October.

EURUSD could advance further if conveniently broken above the 1.147 resistance level. If the level holds, a corrective dip should follow close to 1.14 before a new bullish resurgence. The year-long bearish impulse wave ended at 1.1215 with a rally to 1.147. These two levels have been the extremes of a range-bound Euro price action. Above 1.147, price should advance to 1.155-1.16.

EURUSD Elliott Wave Analysis and Important Price Levels

In the last update where we used the chart below, it was expected that price would remain below 1.144 and drop to 1.13-1.132 to complete a triangle wave b of a corrective rally to 1.155-1.16.
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Price continued upside to hit 1.144 but the dip that followed looked very shallow before it broke above the wave b-d resistance line to hit 1.147. From this point, there are two scenarios we can look at. Both scenarios still support a price advancement to 1.155-1.16 or higher.

1st Scenario

The scenario above shows a very shallow wave E at 1.1365. This aligns with the larger degree triangle wave b (circled). From 1.1365, there is an expectation of a bullish run to 1.155-1.16. The intraday support level is at 1.144 and price might retest it before advancing further. If a strong dip happens back to 1.1365 instead, the second scenario will play out better.

2nd Scenario

The second scenario above suggests the dip to 1.1365 is too shallow for the triangle pattern. A double zigzag wave b (instead of a triangle) from 1.147 to 1.127 might play out in place of this. The rally from 1.127 back to 1.144 is expected to be the first sub-wave of the c-leg of the bullish correction from 1.1215. A deep correction to 1.13-1.135 could happen before the bullish move continues. The bullish target zone for this scenario is 1.17-1.18

From technical perspective, Euro might advance further in the coming days. Unless a break below 1.127 happens, the bulls are expected to still be in control perhaps for the rest of the year.

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