EURUSD has stayed sideways for about 48 hours after a surge. What next? The following give insights based on Elliott wave theory.
February 21, 2019, | AtoZ Markets – EURUSD is trading unchanged from yesterday's prices. Now confined in a 50 pips range after Tuesday's intra-day rally above 1.1350 to 1.1370 where it has peaked so far this week. On Wednesday and Thursday, price was in a range between 1.1370 and 1.1320. The range-bound move continues below 1.1350 in the Asian session and the early hours of the London session today. Price would need a trigger to decide where next it will move. Three FOMC members and the ECB president will speak today at different events, probably the market will get the trigger it needed.
From 1.1235, EURUSD started a bullish correction of the 1.1515-to-1.1235 bearish impulse wave move. The long-term direction is still bearish until price shows otherwise. The current sideways is completing an intra-day bullish triangle pattern which suggests the correction upside might not be over yet. Further rallies to 1.14 are on the cards unless a fast break happens downside.
EURUSD Elliott wave analysis
In the last update, we identified that a bearish impulse wave from 1.1515 ended at 1.1235 with a diagonal 5th. Price made the first surge to 1.1333 on Monday. On Tuesday, there was a corrective dip, and we expected price to push further upside to 1.14. Price has gone upside as expected and there is probably room for more. We used the chart below in the last update.
We expected a simple zigzag pattern but price is painting a different corrective pattern after the 48-hours sideways run. The ideal bullish target for this forecast is 1.14 (the 61.8% retracement of the 1.1515-1.1235 bearish run). Here is what price pattern is morphing into.
A double zigzag pattern is emerging. Wave w ended just below 1.1370 and price is making a triangle wave x with 1.132 support base. The corrective rally from 1.1235 is within a rising channel. Unless a fast break happens below the channel below 1.1320, we should expect the bullish correction to go further steadily until it finally completes.
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