EURUSD has gained positive traction in March as it heads above 1.13. Ahead of important economic data and events this week, the following give insights based on Elliott wave theory.
March 18, 2019.| AtoZ Markets – EURUSD has been boosted last week to hit its highest price since March 4. Price is trading around 1.134 where it closed on Friday. This currency pair is riding on a weaker Dollar after uncertainties arose again following the pushing back of the trade meetings between Trump and Xi till April. However, the market still retains investors’ optimism that a deal will be done. The US Treasury yield was pushed lower on Friday after weak US data suggesting US inflation might be losing some traction. Though business activities in the US remain strong but somewhat weaker inflation might force the FED to review monetary decisions in their next meeting on Wednesday. However, the FED is expected to hold the fund rates unchanged.
This currency pair is expected to be driven largely by the broader market sentiments and the FOMC decision on Wednesday before Thursday’s EU economic summit. The union will meet in Brussels on Thursday to vote whether to grant the UK’s request for an extension on the article 50. This may partly cause a big move on EURUSD especially if an extension is not granted.
EURUSD has gained about 170 pips in the last 7 trading days and closed again above 1.13 to enter into the 1.13-1.15 psychological range. However, the price is now getting close to the 1.135-1.136 zone where it might meet some resistance to drive lower before picking to 1.142.
EURUSD Elliott wave analysis and important price levels
The current rally started after price completed a leading diagonal pattern at 1.1175. The diagonal, which started on January 10 at 1.1570, was expected to be followed by a 3-wave bullish correction. The manner of advancement of the bullish correction suggests higher rallies will be seen toward 1.142 or above. In the last update, we used the chart below.
As the chart below shows, wave a has continued toward 1.135. Wave b dip might follow. Wave c will most likely drive above the wave ii-iv diagonal resistance line up to 1.142.
The bearish trend should continue after the 3-wave bullish correction. On another note, the diagonal might serve as an ending diagonal, ending the bearish trend at 1.1175. A strong bullish move above 1.15 is the first indicator of this narrative.
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