EURUSD heading lower towards 1.1600 at least after pulling back

Written by

July 5, 2021

Technical Analysis:

EURUSD seems to be pulling back a bit higher after dropping through 1.1807 lows over the last week. The currency has remained in control of bears since 1.2266 high and is expected to continue lower towards 1.1740 in the near term.

EURUSD might be carving a lower degree wave iv as a triangle or an expanded flat, which could terminate close to 1.2 handle. If correct, we can expect some more sideways action before it could reverse lower towards 1.1740 mark.

Looking into the short term wave counts, EURUSD might complete Wave 3 around 1.1740 levels. It might lead to further pullback towards 1.2020 to terminate Wave 4. Finally, Wave 5 might terminate towards 1.1600 and lower.

If the above structure unfolds accordingly, EURUSD bulls might be poised to produce a counter trend rally thereafter. If the entire drop from 1.2266 unfolds into 5 waves at one larger degree, prices might drop through 1.1300 and 1.0636 levels respectively.

Traders might be preparing to book short term profit around 1.1740 mark and then wait for a pullback to sell higher. Bears are expected to remain in control until prices stay below 1.2250 levels respectively.

Prepared by

Finacademy Technical Team

Related Articles

Gold finds support ahead of $1758 mark

Gold finds support ahead of $1758 mark

Gold dropped to $1770 mark on Tuesday before finding some support. The yellow metal is still testing its intermediate trend line support connecting $1721 and $1758 levels respectively.

US dollar index carves a potential top at 96.88

US dollar index carves a potential top at 96.88

The US dollar index carves a meaningful top around 96.88 mark over the last week. The index reversed sharply on Friday confirming a bearish Evening Star candlestick pattern on the daily chart.