Technical Analysis:
EURUSD had dropped to 1.1560-65 low over the past week before finding some support. The currency pair rallied through 1.1607 thereafter, taking out initial resistance on lower timeframe. Moreover, a bullish engulfing pattern is produced on the daily chart indicating potential reversal.
EURUSD has also dropped to the Elliott Channel support as seen on the chart presented. High probability remains for a bullish reversal at least towards 1.1900-10 mark, which is initial resistance. If the corrective drop is complete, EURO bulls would be inclined to push through 1.2350 mark.
EURUSD reversed from 1.2350 mark in January 2021, and has carved (A)-(B)-(C) corrective wave as labelled on the chart. If the above is correct, bulls would be back in control and push above 1.2350 in the next several weeks.
Alternatively, the corrective wave (A)-(B)-(C) might be unfolding Wave (C) towards 1.1300 mark. In this case EURUSD might have terminated Wave 1 of (C) around 1.1560-65 and should rally towards 1.1900-1.2000 handle to terminate Wave 2 of (C), before turning lower again.
Either way, a rally from current levels remain high probability. The fibonacci 0.50 retracement of potential Wave 1 is around 1.1900, which could be tested in the next few trading sessions. Traders might position themselves accordingly.
Prepared by
Finacademy Technical Team
Related Articles
Gold prepares to take on $1812-30 zone near term
Gold prices dropped through $1773 lows on Thursday before finding support again. The drop from $1793 was in-line with price action of a gartley.
US dollar index is bearish against 97.00
The US dollar index might have carved a lower high around 96.50 mark on Tuesday. The index dropped through 95.80 levels on Wednesday before finding some support.
USDJPY is approaching resistance around 114.40-50
USDJPY is soon approaching a formidable resistance zone around the 114.40-50 mark. The currency pair has been carving a corrective rally since 112.50 lows.
Recent Comments