EURUSD Elliott Wave Analysis: Price Drops Below 1.14, Could Hit 1.13 Soon

EURUSD is trading below 1.14 after German factory orders missed with -1.6%. The following looks at the technical sides based on Elliott wave theory.

February 06, 2019 | AtoZ MarketsEURUSD has continued a gradual loss since it dropped from last week peak of 1.1515. From that top, price has lost more than 130 Pips to stay below 1.14 today so far. Currently, Euro momentum is very low and the downside move this week has been very slow. If price should continue downside, it should be able to hit 1.129 though a retest of 1.14 or even a slight break above, might happen today. Earlier today, German factory order missed, creating fears of recession for the largest European economy.

From Elliott wave perspective, EURUSD completed a corrective pattern at 1.1515. The trend is bearish. Often times, when a trend is identified, price continues in the direction of the prevailing trend after each bounces or dips. The 1.129-1.1515 bounce in a bearish trend indicated that EURUSD will most likely continue downside in the coming weeks. The most important price levels are 1.13 and 1.15. Price has stayed in-between these two levels for quite some time, just as it happens many times in the second half of 2018. A dip below 1.13 will most likely set loose the bears, leading to a break below 1.1215 support. However, price should hold below 1.1515 to keep the bears trending.

EURUSD Elliott Wave Analysis and Important Levels

In the last update, we started a bearish impulse wave from 1.1515 after we had correctly identified 1.15-1.1525 as a reversal zone. The first sub-wave of the expected bearish run was identified to have completed on Tuesday and a slight bullish correction was expected to follow. The chart below was used.

The intraday corrective rally expected to 1.145-1.1475 to complete the 2nd minor wave, didn’t happen as price dropped below 1.14. The chart below shows the new update supporting further price drop.

The chart shows the first impulse wave drive away from the bullish territory, in full motion. The dip from 1.1515 to 1.1435 and an eventual rally to 1.149 completed the first two minor waves. The dip below 1.1435 shows the start of the 3rd wave which is expected to extend to 1.136-1.133 before another minor pull. This wave formation will most likely run to 1.13 if price stays below 1.1435.

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