The EURUSD is currently trading around 1.11 ahead of the US employment data coming soon. The following technical insight is based on the Elliott wave theory.
August 02, 2019 | AtoZ Markets – EURUSD reversed from the 1.1025-1.1050 support zone on Thursday. It pushed a bit above the 1.11 critical level following President Trump’s announcement of a new 10% tariffs on Chinese goods of around $300 billion worth. The US yield is also dropping and therefore mounting pressure on the Dollar. EURUSD could push further after dropping to its 30-month low following Wednesday’s Fed hawkish comments.
The focus of the market today is now shifted to the US Non-Farm Payrolls. The market is expecting 164k. If the actual is better by 50k or more, USD should return upside in the short term. However, if the actual data is worse by 50k or more, USD should tank further.
This week is already busy with big moves on Wednesday and Thursday just as expected that it would be. The US stock markets are making bearish reversals after the multi-year tops. The USD could even drop further in the coming weeks and months thereby projecting EURUSD to multi-month highs.
EURUSD analysis: important price levels
Price hit the 1.11 level and is currently dropping below it. It is less than two hours before the NFP. The price might go sideways until the NFP is released as traders pull out volume. 1.1025 now stands as the nearest support level. Unless a break below this level happens, we should see further rallies to the 1.118-1.12 resistance zone, 1.1285 and 1.1412 critical levels in the coming days.
EURUSD Elliott wave analysis
We have followed the bearish impulse wave which started in January 2018. A few months ago, we had expected a fall to 1.1050. In the recent updates, we extended the reversal zone to 1.105-1.1025 as the 5th wave of the impulse wave was about to complete an ending diagonal. Price dipped into the zone and in the last update, we expected a bounce as the chart below shows.
Price bounced as expected and the analysis looks perfect. It remains to be seen how the higher price would go. The chart below expected an impulse wave rally toward 1.1285.
Price is currently corrective below 1.1115. If the dip stays above 1.1026 low, the next break above 1.1115 could be a good bullish entry for a rally toward the 1.13 handle. The long term bullish correction is expected to hit 1.18 or 1.2.