EURUSD rises above 1.12 after a minor dip. The following looks at what could happen next based on the Elliott wave theory.
August 07, 2019 | AtoZ Markets - The US-China trade fight continues to influence market sentiments as investors go cautious. This in effect is putting pressure on the USD as other 'safe-havens' like Gold and Yen are largely bought. Major stock indexes and the US bond yield flopped as a result of Yuan depressing by the Chinese government to revenge the new US tariffs.
Meanwhile, the EURUSD currency pair has benefitted from the current political spats between the two giants. The pair which continued the bearish run it started in January 2018 got a lift from 1.1025 and hit 1.1250 on Tuesday. However, before the end of the day, the price dropped quickly to 1.1170. Currently, the immediate sentiment remains bullish as the price pushed back above 1.12.
EURUSD Analysis: important price levels
Above the current price level, the nearest barrier to the bulls is the 1.1285-1.13 zone. A break above this zone should lead to the 1.14 handle. On the downside, price is expected to make a deeper corrective dip after moving away from 1.12. The 1.118-1.12 intraday zone currently provides support. A retest of 1.115 round level is also possible. However, price is expected to stay above 1.105-1.1025 support zone if the bullish run will continue. A dip below this zone might continue the long term bearish trend below the 1.1 handle.
EURUSD Elliott wave analysis
The EURUSD Elliott wave forecast suggests the bearish trend from January 2018 has completed at 1.1025 with an impulse wave that ended with a 5th wave diagonal. The reactive bounce that followed was very much expected. A 3-wave bullish correction is now expected to 1.18-1.2 price zone. This means that this currency pair will most likely continue the current bullish run throughout the rest of the year unless 1.1025 is broken downside.
We started the new wave count from 1.1025. The first rally away from this support zone is completing an impulse wave. In the last update, after a push to 1.125, we expected a minor dip before the bullish correction continues.
Price dipped but was shallow before pushing advancing toward 1.125. The new chart below added a little adjustment if 1.1250 is pierced upwards.
If the minor impulse wave doesn't end at 1.1250, the next stop is the 1.1285-1.13 zone. It seems the best opportunity for buyers is to wait and buy the dips.