EURUSD flashed down earlier today, dropping about 50 Pips as the US-China trade talk continues. The following give insights based on Elliott wave theory.
January 08, 2019 | AtoZ Markets – EURUSD was resisted just below 1.15 after starting this week good. The week's bullish run paused just below 1.15 and then followed by a 50 pips dip after the US-China trade talk sort of lifted the US dollar. There are no viable economic events to look out for today and this currency pair might be driven primarily by demand/supply forces and the headlines from the trade talks between the two giant nations.
Meanwhile, from technical perspectives, EURUSD might be heading downside if it remains below 1.15. There are two scenarios which are still valid with the current market positions. 1.1485-1.15 is a very strong intraday resistance zone. Aside this, the rally from 1.13 is a correction of the near 200 Pips dip that happened last week. After last year's bearish impulse wave ended at 1.1215, the bullish move that followed looks corrective and very shallow. The two most likely situations here are:
1. The impulse wave was not complete at 1.1215 and will continue further downside below 1.1215 or
2. The correction would be a complex one. This means that the expected dip should be limited around 1.13 before the larger degree bullish correction continues.
In the last update, the chart below was used.
And so we expected that ''In as much as price remains below 1.15, a big bearish move below 1.13 down to 1.11 can still happen''. Price rallied a bit above 1.1444 but remained below 1.15 and corrective as well. The 50-pips drop that happened earlier today was price's first reaction to this forecast. Here is the current wave analysis.
EURUSD Elliott Wave Analysis and Important Price Levels
The bullish correction from 1.1305 might have ended at 1.1485 after the fast dip to 1.1430. From 1.1485, the chart above started a bearish impulse wave below 1.13, if price breaks below 1.1430 to commence the 3rd sub-wave of this degree. A break above 1.1485 would invalidate this setup and set price on the path of the alternative scenario that suggests the bullish correction from 1.1215 continues to 1.155-1.16.
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