Euro and pound see bearish forecast ahead on Elliott Wave

EUR/USD (FOREX:EURUSD) found support on Friday after the nonfarm payrolls report around 1.3100 area, from which we have seen a more than 80-pip rally back to the wave 2-wave 4 trendline. Usually when this occurs it means that a five wave decline is complete and that the market reversed into a temporary correction. As such, we are now tracking an A-B-C retracement back to 1.3225-1.3250 region before we may turn bearish again. In that zone, we can also see a former wave four that may react as a reversal level and cause a new sell-off for the pair.

EUR/USD 4h Elliott Wave Analysis

 

Meanwhile, we also are tracking GBP/USD (FOREX:GBPUSD), which is stronger than EUR/USD lately, but it also has a bearish wave structure. Rally from March low on GBP/USD is a complex pattern most likely a flat in wave 2 where we may see test of 1.5750 this week after recent bounce from the lower side of a current upward channel. However, this new high will be just a final leg, fifth wave within wave (C), so larger bearish trend remains in view but GBP/USD just needs more time to turn down when compared to EUR/USD, but we think that sooner or later pound will also turn south and catch the euro weakness.

GBPUSD Daily Elliott Wave Analysis

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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