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