EURUSD continues the bearish run, dropping below the 1.13 handle easily. What next? The following looks at what could happen next based on Elliott wave theory.
February 12, 2019 | AtoZ Markets - The uncertainties in the Eurozone continues as sellers add to their positions to drive price further downside. Price made a strong case to push slightly above 1.15 in January but after talks of recession in Italy and Germany coupled with the Brexit uncertainties, the Euro returned downside. This month EURUSD has dropped about 200 Pips, losing 1.8% in the process. Monday's break below 1.13 handle could set price for further dips to 1.1215 support level. Today, Fed chair Powell will deliver a speech in Mississippi.
Aside breaking below 1.13 handle, 1.1290 support couldn't hold price higher as the bearish pressure persists. In the last update, we started counting a 5-wave dip from 1.1515 after correctly identifying the reversal price levels. A 5-wave dip would be expected to be followed by a 3-wave correction upside before price continues downside. If the bearish trend that dominated 2018 should continue this year, the chances of having Euro and Dollar at parity is very high. Below 1.1290, the next support is 1.1215. Will price continue downside?
EURUSD Elliott Wave Analysis and Important Price Levels
In the last update, the chart below was used.
The expected 4th wave (circled) correction was very shallow. Price only retraced to 1.136 before breaking downside, below 1.13. It's not unusual to ignore such a shallow correction and consider the slight bounce part of the 3rd wave as the chart below shows.
The 3rd wave is very much extended. We might still see a minor corrective push upside to 1.13 or slightly above to complete the 4th wave before dropping further to 1.1215 support. At the end of the 5th wave, a big corrective push to 1.1350 or above, should be seen.
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