EURUSD Outlook | Written by ActionForex.com
EUR/USD engaged in choppy retreat from 1.3437 last week. The corrective structure suggests that rebound from 1.2969 is not over yet and another rise is in favor. Above 1.3437 will bring rise resumption. In such case, 1.3447 resistance should be taken out and that would confirm that fall from 1.4281 has completed with three waves down to 1.2969, just missing 100% projection of 1.4281 to 1.3447 from 1.3785 at 1.2951. EUR/USD should then target 1.3785 and then 1.4281 high. We'll favor this bullish case as long as 1.2969 support holds.
In the bigger picture, the three wave structure of the fall from 1.4281 to 1.2969 argue that it's merely a correction only. Also, it raises the possibility that whole rise from 1.1875 is indeed impulsive in nature, with a small fourth wave from 1.4150 to 1.3733. Break of 1.3785 resistance will bolster the bullish case that rise from 1.1875 is resuming for another high above 1.4281 and revive the case that medium term correction from 1.6039 is already finished at 1.1875. On the downside, a break below 1.2969 again will in turn solidify the case that correction from 1.6039 is still in progress for another low below 1.1875 before completion.
In the long term picture, considering the five wave impulsive structure of the long term up trend from 2000 low of 0.8223 to 2008 high of 1.6039, price actions from 1.6039 are viewed as a correction only. Hence, firstly, we'd expect strong support between 61.8% retracement of 0.8223 to 1.6039 at 1.1209 and 1.1639 to contain downside. Secondly, we'd expect another high above 1.6039 eventually, after correction from 1.6039 is confirmed to be finished.
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