EURUSD slips below 1.1 and now trades around its lowest price in two weeks. The price is currently close to challenging the 1.099 support level.
November 27, 2019 | AtoZ Markets – The Euro-dollar currency pair has resisted any chance of resurgence this week so far. After the long term bearish trend resumed last week, the fall has continued this week. At this point, it seems any bullish move will be minor and corrective in as much as the price stays below the 1.11 critical level. Earlier this week, EURUSD rallied slightly to 1.1025. However, the price has returned downside following some resurgence from the USD. A break below 1.099 now seems to be inevitable.
EURUSD slips below 1.1 following trade optimism
The US-China trade deal remains the major risk concern. The two parties have been making optimistic statements since the end of the last week. The effect has been more visible on the equities markets. Traders remain cautious of the currency market and the demand for the USD seems to be climbing. Meanwhile, the EUR dropped as a result of a disappointing Italian consumer confidence data released earlier today. The major support levels are 1.099 and 1.088 (100 pips apart). However, there might be a minor bounce around 1.099 to push toward 1.105 before the next set of bearish waves drags the market below 1.088.
EURUSD Elliott wave analysis
From the Elliott wave perspective, the long term bearish impulse wave from 1.255 in February 2018 is still developing. In the previous updates, we identified the 5th wave of this impulse wave to be completing an ending diagonal pattern. The pattern has been sluggish and extended. The swift rally from 1.088 to 1.1175 completed the 4th wave of the ending diagonal larger 5th wave – like wave iv of (iv). In the last update, we used the chart below (Charting tools from TradingView).
The price completed a head and shoulder reversal pattern around 1.11. EURUSD slips below 1.1 afterwards. The current bearish move should break below 1.099 before 1.088. Hence, we started counting a bearish impulse wave from 1.108. In the new chart below, it seems the impulse wave is around the 5th wave.
The 5th wave could be supported at 1.099. If a 3-wave bullish correction follows to 1.105 or its neighbourhood, fresh sellers could look for a position as the next bearish wave should take the price below 1.088.