EURUSD drops steadily as it approaches 1.13 to continue the bearish trend. The following give technical insights based on Elliott wave theory.
February 07, 2019 | AtoZ Markets - On Thursday, Euro loses further making it four days of consecutive losses this week. Price dropped below 1.14 this week and looks very likely to drop below 1.13 handle. The Dollar rally is gaining some traction this week after last week Fed-induced slump. The economic troubles in Italy, poor data from Germany and Brexit uncertainties in the UK would drag the EUR bearish sentiments further. It now looks very much likely that this week will end bearish with targets below 1.13.
Over the last six months, 1.15 and 1.13 have many times, acted as support and resistance levels for this currency pair. When the last rally hit 1.15, especially on the back of a bullish corrective pattern, there was an inevitable feeling that price would not hold above it. Though there was a slight move to 1.1515, the penetration wasn't significant as price dropped yet again. Price is now close to 1.13 after making 3-legs downside in what we could consider as an impulse wave. What could happen next? It's very much likely that, unlike 1.15, this level will not hold as a major support/turning point. Price is expected to drop below 1.13 to continue the bearish trend that started and continued throughout 2018.
EURUSD Elliott Wave Analysis and Important Levels
in the last update, we looked at the drop from 1.1515 and expected a 5-wave run downside. The chart below was used in the last update.
After the dip below 1.1435, we expected the 3rd minor wave of this degree to continue to 1.136-1.133 price zone. At this zone, a minor 4th wave correction might happen to price levels below 1.14 before the trend resumes downside. After this update, price slumped further to the zone mentioned as the chart below shows.
A minor correction to 1.138 could emerge before price drops further to 1.13. At a significant price level like 1.13, a minor bullish correction might happen after the completion of the current bearish impulse wave from 1.1515. This setup will be invalid if price rallies from the current position to 1.1435 and above.
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