EURUSD has rallied back to 1.13 after a reversal chart pattern completed last week. The following EURUSD Elliott wave analysis shares insights ahead of US data.
13 March 2019 | AtoZ Markets – EURUSD is going steadily upside after recovering above the 1.1215-1.1235 zone despite the uncertainties of the Brexit deal. The EUR-GBP correlation has been dropping in recent times since the Brexit referendum votes in the UK. While the GBP spikes out of Brexit headlines and events, EUR seems to be calm and quiet. The pair has rallied back to 1.13 as the market awaits data releases from the U.S today. EURUSD is still in a long-term bearish trend and might continue in that direction when the current corrective rally ends. The market expects US core durable goods orders and PPI m/m for February to come at 0.1% and 0.2% respectively.
EURUSD Elliott wave analysis and important price levels
A 3-wave bullish correction follows an impulse wave (5-wave) in the opposite direction, according to Elliott wave theory. A 5-wave leading diagonal pattern completed at 1.117 last week and a 3-wave bullish correction has been in motion. The dip started after the 1st week of January and dropped 400 Pips from 1.157. Though we are uncertain of how high the correction would go but can expect a reversal at particular price zones. In the last update, we used the chart below to show the leading diagonal pattern at 1.117.
We expected a shallow correction to 1.13-1.137 but the price could even go higher than that, to 1.142. The 61.8% correction ends at 1.142. The major resistance levels are 1.142, 1.151 and 1.157.
Price has gained about 85 pips to hit 1.13. Wave a of the correction is not yet over until a corrective wave b is clear and complete. Price could drop slightly below 1.1325 to retest 1.1235-50 before rallying further (wave c) to 1.1375 or even 1.142. The bullish correction might do more therefore until a corrective bullish pattern is complete, the price goes to the upside. A sudden break below 1.117 would jeopardize the development of this bullish correction. The prevailing trend is still bearish until price proves otherwise.
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