EURUSD Elliott Wave Analysis: Price Remains Bullish Toward 1.17

EURUSD still points upside with major concerns on the Italian fiscal policy. The following looks at the intraday EURUSD Elliott wave forecast and important price levels.

Italy approved expansionary fiscal policy in order to fight recessionary pressures. Expansionary fiscal policy involves decreasing taxes, increasing government expenditures or both. Yesterday, after the negative US retail sales data, EURO advanced toward 1.16 but dropped later during the new York session. During the Asian session today, price continued yesterday's dip to 1.156 before the bulls took over at the start of the London session. To continue the bullish run, price would have to break above 1.16 up and up to 1.17 if the bullish pressure persists. Does this align with our current forecast?

EURUSD Elliott Wave Analysis and Important Price Levels

In yesterday's forecast, we continued the bullish forecast we had from 1.143. Price was expected to bridge 1.16 to 1.165-1.17. The chart below was used in the last update.

With the current bullish resurgence, it's sufficient to say wave B (circled) has completed. Wave C has already started and would be confirmed once price breaks above 1.1610. There are three important Fibonacci levels clustered between 1.1650-1.1716. If the bullish run continues, price would be expected to play around this zone. If the bullish momentum gets stronger and breaks above 1.1716 up to 1.1750, the rally from 1.143 might end up being an impulse wave. Otherwise, price will be expected to be resisted below 1.1750 and re-start the larger bearish move.

Price dropped back below 1.1610 as the chart below shows.

Above 1.155, the bullish move from 1.143 is expected to continue above 1.1610. If price breaks above 1.161, we will see price rally further to 1.165 to 1.17 to complete a larger degree zigzag pattern from 1.143. If the rally breaks above 1.1715, we might be having a bullish impulse wave from 1.143 instead. If price goes with the alternative count (wave 1-5 (circled), a strong rally to 1.2 handle is in the cards. Otherwise, price would be expected to drop from 1.165-1.1715. In another scenario, if the current rally from 1.1535 still stays between 1.161 and 1.1535, we should look for a sideway triangle pattern which still favors a bullish breakout. On the downside, buyers should be wary of a break below 1.1535 as that would invalidate the bullish scenario and complete a reversal double top pattern at 1.16.

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