EURUSD counter trend to accelerate towards 1.2050/70

Technical Analysis:

EURUSD bounced off after testing 1.1770 levels over the last week and managed to rally through 1.1908 before finding resistance. It looks like the counter trend rally has now begun against 1.1751 lows and has potential to reach up to 1.2050/70 zone.

EURUSD had earlier dropped from 1.2266 highs through 1.1751, sub dividing into 5 waves marking an impulse. Ideally, an impulse is followed by a corrective wave in the opposite direction. It is quite possible that first wave of the correction might be complete around 1.1908.

At the moment, EURUSD is correcting its gains (1.1772-1.1908) through the last week. A drop towards 1.1810/20 remains possible in the near term, before resuming higher towards 1.2050/70 levels. For the above structure to hold, 1.1751 should ideally remain intact.

Trading opportunities might be offered in both directions as traders might prepare to build long positions around 1.1810/20 initially. Once the counter trend rally terminates above 1..2050/70 mark, bears might be back in control.

If the above unfolds accordingly, we might witness a rally from current levels through 1.2050/70 mark and reversal thereafter. The bigger picture still reveals possibility for a continued drop towards 1.1300 levels going forward.

Prepared by

Finacademy Technical Team