EURUSD Elliott wave analysis: reversal pattern at 1.14 signals possible ‘bearishness’

EURUSD has completed a reversal pattern at 1.14 and thus signals the continuation of the bearish trend. The following EURUSD Elliott wave analysis give more insights.

February 28, 2019| AtoZ MarketsEURUSD could be at the verge of another bearish onslaught after it was rejected at 1.14 twice before dropping below it. The German inflation and advanced US GDP data coming later today are the economic highlights that traders and short term investors would look forward to. The Eurozone has been under an intense geopolitical tension which spanned through 2018 and has been persistent this year. The technicals are also showing that price might be at the brink of another bearish move. 

Price failed to bridge above the important 1.14 yesterday after two attempts. It therefore completed a double top reversal pattern after the corrective rally from 1.1235 looks ending. It eventually dropped to 1.136 (40 pips from 1.14) on Wednesday. Today, however, price started around 1.137 and currently making a good move to 1.1385 but might fall unless a break above 1.14 finally happens. Therefore, price behavious in the last 12 hours has seen it correct between 1.1385 and 1.136. Hence, a break below 1.136 might see the bears resume and drive this currency pair below 1.1215. 

EURUSD Elliott wave analysis and important price levels

In the last update, we had expected that the rally from 1.1235 is corrective and might end at 1.14-1.144 reversal zone. A good prive reversal pattern at this zone gives a strong bearish signal. The chart below was used in the last update.

If there was no reversal signal at this zone, a break below the zigzag rising channel would be another bearish clue to look out for. With the strong data coming later today, EURUSD which has not been volatile since last week might just get its swagger back and move heavily. The chart below shows the new update.

A break below 1.1360 could be a good short opportunity for intraday and swing traders to take 75-100 pips or more from an eventual price fall. Just below 1.1360, price would have also broken below the rising channel where the double zigzag pattern has been contained. The ultimate bearish targets are 1.13 and 1.1215. If there is no breakout, a retest of 1.14 or even a bridge to 1.144 could happen. 

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