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Technical analysis

EURUSD Elliott Wave Analysis: Price Consolidates around 1.16

Sanmi Adeagbo | Oct. 12, 2018
EURUSD Elliott Wave Analysis: Price Consolidates around 1.16

EURUSD dropped marginally below 1.6 in the Asian session today after yesterday's upward push away from 1.15 level. Will EURUSD end the week positive?

Today, the IMF will hold a meeting. This meeting is held usually twice a year. The meeting is also open to questions from the Press and will be attended by the representatives of World Bank and IMF. Market could react to hawkish or dovish headlines from this event. The USD has been negative this week after last week's rate hike rallies. This week's stock market crash and the inconclusive US-China trade war are also risk concerns. The FOMC member, Bostic will speak today in Atlanta. While this events come up, EURUSD continues below 1.1815 and above 1.143 extreme levels formed since late September.

EURUSD Technical Overview and Important Price Levels

In the last update, EURUSD was expected to continue the rally from 1.143 toward 1.16-1.17 before the next dip. A bullish correction was expected to continue to 1.17 after a bearish drop to 1.155. The chart below was used in the last update.

Price is advancing in a trendy manner - taking previous highs without bridging previous lows. This is expected to continue to 1.1625-1.1670 important Fibonacci retracement zone. This zone could act as a resistance. More important is the price pattern developing from 1.143. The pattern is still developing and looks impulsive. The most important resistance level apart from the Fib retracement zone is 1.18-1.185. On the downside, the rally might be interrupted by a bearish correction to retest 1.15 before it continues upside. A break below 1.143 will definitely look bearish again.

Price rallied close to 1.1625 (50% Fib retracement) before dropping back below 1.16. The chart below shows the new update.

The bullish correction from 1.143 might have completed its first leg - wave a (circled). A dip to 1.154 (closest intraday support) might happen before price returns upside to 1.1625-1.17. 1.154 and 1.143 are the important support levels while 1.1625-1.167 are important price levels upside. At 1.18-1.1815, there is a major resistance zone. It will require a huge volatility to break above the 1.18-1.1815 today. It's sufficient to say that with today's events, price might get needed momentum to accelerate or drop massively.

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