EURUSD has finally reversed lower from 1.2218 highs last week, after having drifted sideways for a while. The drop was much anticipated as bears have managed to take out over 300 pips since last Wednesday. They remain poised to target below 1.1700 in the near term.
Looking at the wave structure, the earlier drop between 1.2350 and 1.1700 had unfolded into 5 waves, producing a leading diagonal Wave (1) on the chart here. Leading diagonals normally appear at the beginning of a new trend or as Wave A of the corrective A-B-C pattern.
Further, the subsequent rally from 1.1700 through 1.2266 was a corrective wave A-B-C; labelled as Wave (2) on the chart here. A potential Wave (3) lower seems to be progressing towards 1.1700 levels at least, if not further.
The fibonacci extensions are pointing towards 1.1300 levels at least and potential remains for a drop toward 1.0636 as well. We shall re-look at the price action around 1.1300 mark to see if bears still remain to drag lower or not.
Any intraday or interday rally from current price action should be taken as an opportunity to initiate fresh short positions. Most traders remain inclined to hold and add further short positions, going further.
Finacademy Technical Team
EURUSD still remains vulnerable for a drop towards 1.1720 mark, before finding short term support. The currency is trading around 1.1780 levels for now as bears remain poised to print one more low below 1.1751 in the near term.
SPX500 has raised through 4383 highs today, up almost 150 points from the lows around 4234 print early this week. The indice might be testing its previous swing highs around 4394.6 levels, before turning lower again. The structure remains bearish until prices stay below 4394.6.
USDJPY bounced off sharply after printing lows around 109.00 levels early this week. We were expecting a potential drop until 108.50 mark, which is fibonacci 0.382 retracement of larger degree Wave (3) between 103.30 and 111.75 levels respectively.