FX.co ★ EUR/USD Wave analysis for January 11, 2013

EUR/USD Elliott Wave
This week the EUR/USD pair was trading in the sideways move, corrective 2 wave (coloured blue) of the bigger (3) wave (coloured green) was developing. Yesterday during the European session we could observe slight ascending movement from 1.3037 toward the 1.3116 level. Therefore, during the early New York session after ECB speech this major pair started pushing higher reaching a new weekly high at 1.3271 level. Today the EUR/USD pair is trading around 1.3270 and we expect to see the price above 1.4000 level in the next few weeks. In accordance with our wave rules and taking into account that the wave 1 should retrace 161.8% of the wave 3, we can define the potential targets with measuring wave 1 with take profit at 1.4043 (161.8% of wave 1). To reduce the risk, we can use invalidation at 1.2987 level as stop loss.

Support and Resistance
(S3) 1.2885 (S2) 1.2962 (S1) 1.3114 (PP) 1.3191 (R1) 1.3343 (R2) 1.3420 (R3) 1.3572

Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the upward movement. That is why long positions at level 1.2780 with stop loss 1.2987 take profit at 1.4043 are recommended.