EURUSD: Complex Correction Near Completion
EURUSD price bounced this month but despite some strong bullish momentum we need to keep an eye on the big picture which still shows a sideways price action since start of 2015. We are tracking a triangle which has one of the most complex structures; but important is that it’s a continuation pattern so we shall see more weakness after a completion of A-B-C-D-E subwaves. At the moment we see price in wave E that can find resistance around 1.1200-1.1300 area. We however need an impulsive reversal down next week to confirm more weakness ahead; into big wave V that will go beneath 2015 lows. A short-term invalidation level is at 1.1380; rise above it will put wave C-circled back in play.
On the lower time frame, EURUSD has turned up from 1.0820 last week and rallied sharply towards 61.8-78.6% Fibonacci retracement level of wave D. Well, despite very strong leg up we see rally as wave E final leg in big wave IV triangle so be aware of a possible strong reversal to the downside in days ahead. But as always we need a confirming price action; in other words, we need minor five wave drop back towards 1.1000 level or lower to confirm a top in place. In that case we will look for a new EUR weakness back to 1.0800. For now invalidation level remains at 1.1377.
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