EURUSD tests 1.1740/45 but bulls might be poised to pullback

Written by

August 9, 2021

Technical Analysis:

EURUSD prints fresh low at 1.1742 before pulling back through 1.1760/63 mark as bulls might be preparing to stage a comeback soon. Downside remains limited from here as support is seen towards 1.1700 mark while probability for a meaningful pullback increases.

EURUSD remains in a larger degree corrective wave (A)-(B)-(C) since 1.2350 highs registered on January 06, 2021. The currency might have completed waves (A) and (B) around 1.1704 and 1.2266 levels respectively.

EURO bears might be underway to complete Wave (C) towards 1.1300 levels going forward. Furthermore it is expected to unfold into 5 waves impulse or a diagonal structure. It could be possible that the first wave is complete between 1.2266 and 1.1742 levels respectively.

If the above structure is correct, EURUSD might produce a counter trend rally towards 1.2050/70 levels as Wave 2 begins to unfold. The fibonacci 0.618 retracement of the entire drop between 1.2266 and 1.1742 is also seen through 1.2060/70 levels.

High probability remains for a bearish turn if EURUSD bulls are able to push prices towards 1.2050/70 levels. Traders might be prepared to initiate fresh long positions on a break above 1.1900 levels going forward.

Prepared by

Finacademy Technical Team

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