This week, in the last three days, Euro is staying below 1.14 after the ECB delayed rate projection. The following give insights based on Elliott wave theory.
January 18, 2019 | AtoZ Markets - EURUSD has continued downside this week. However, the last three days has been sideways, trading below 1.14, as the Eurozone economy slows down. The ECB is trying to delay the expected rate hike forecast for the the 3rd quarter of 2019. There are no big economic events in sight today for Euro or the Dollar. Price might probably stay silent throughout today as well . What are the technical sides?
From the previous updates, we saw off Euro dip from 1.1575 after the rally from 1.1215 completed a zigzag pattern. It was expected that, if the bearish trend that was seen in much of 2018 would continue, price should drop below 1.13 and 1.1215. Price has since dropped 200 pips to hit 1.1375 but still a way off the bearish zone. EURUSD has acted very magnetic to 1.15 and 1.13 levels in the last 6 months. Currently between these two levels, price could realistically still swindle in any direction. Meanwhile, a dip below 1.13 and 1.1215 will only support the long term bearish trend. What next?
EURUSD Elliott Wave Analysis and Important Price Levels
In the last update, after price has dropped from 1.1575, there was a clear reversal chart pattern spotted with neckline at 1.1450. A break below 1.1450 was expected to be followed by a dip into the 1.13-1.14 territory. The chart below was used.
The head and shoulder reversal pattern signified a potential dip to the lower end of the 1.13-1.14 territory. Price has moved as expected but the momentum slowed down in the last three days. Price currently trades some pips below 1.14. The chart below shows the new update.
The chart above shows an emerging impulse wave dip from 1.1575. The sideways move in the last three days is probably the 4th sub-wave of wave iii. At the end of the triangle, a break down could happen to 1.133 to test the base of the channel line. A break afterwards should see price at 1.13 and below. Price will be most preferred to stay below 1.14-1.1425 intraday resistance zone. A big break above this zone will most likely see further rallies to 1.15 and above, which could hamper the bearish trend development.
Please share your thoughts with us in the comment box below.