EURUSD is trading below 1.15 after returning from 1.1575 last week. Will it continue downside this week? The following give insights based on Elliott wave theory.
January 14, 2019 | AtoZ Markets – Euro has dropped more than 100 Pips since last week high of 1.1575. Markets are concerned about the resumption of the US-China trade war. China's imports and exports have dropped sharply as the demand for their products slows down in the U.S due to impending high tariffs. There are no high impact economic data release today. EURUSD might continue downside in the direction of the technical forecast.
This currency pair started today around 1.1475 (100 pips below last week high). It slowly touched 1.1480 in the low volatility Asian session. Currently, price has broken below Friday's low of 1.146. The technical side looks bearish especially if there is a sufficient break below 1.1475-1.15 support zone. This bearish move will most likely see price back to 1.13 and 1.1215 support levels.
EURUSD Elliott Wave Analysis and Important Price Levels
After looking at two scenarios for a week, price pattern finally looks clear. The rally from 1.1215 is corrective – a complex zigzag pattern. The reversal zone was expected at 1.155-1.16. Price reversed exactly from the mid-way of this zone at 1.1575 and now looks likely to continue the bearish run that started last week. The chart below used in the last update, started a new bearish impulse leg from 1.1575.
A dip to the 1.1475-1.15 support zone was expected to complete the first sub-wave of the expected dip before a pullback. It seems that is currently playing out as the chart below shows.
Price is still slightly around this support zone. If there is a breakaway from this zone, the next bearish target would be 1.135. A break below the lower line of the blue channel would most probably see price drop below 1.1215 to continue the long term bearish trend.
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