Euro advance looking like a correction

EUR/USD reversed higher a few weeks back from around 1.2750 level, but recovery since early April still has a corrective look. With that said, we think that move is complex correction, probably a flat and that the larger trend will continue lower, especially if we consider a five-wave decline from 1.3700 and the start of the year. If we are correct, then current bullish leg should stop somewhere around current 1.3400 -1.3450 resistance area.

EURUSD Daily: Elliott Wave Analysis

 

On the weekly chart we are also still observing the idea of a Head-and-Shoulders pattern, which if correct, should be near completion based on the parallel trend-lines. This pattern is matching nicely with our Elliott Wave Count, but we still need some confirming price action to make sure that EUR/USD is going south. With that said, we would love to see an impulsive fall back to 1.3000 level before bearish reversal can be confirmed! On the other-hand, we will have to change the outlook for the EUR/USD if pair will continue higher in the rest of the year, toward 1.3700.

EURUSD Weekly: Head & Shoulder Pattern

 

About the Author

Gregor Horvat, based in Slovenia, has been in the forex markets since 2003. He is a technical analyst and individual trader who has worked for Capital Forex Group and TheLFB.com. He also is founder of forex services on www.ew-forecast.com. EW-Forecast.com provides technical analysis of the financial markets, highlighting behavioral patterns based on the Elliott Wave Principle (EWP). Website: http://www.ew-forecast.com/

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