FX.co ★ EUR/USD analysis for January 18, 2013

EUR/USD Elliott Wave
Last week the EUR/USD pair was trading upward, impulsive 5 wave (coloured blue) of the bigger (1) wave (coloured green) was developing. Yesterday during the Asian and European sessions we could observe ascending movement from 1.3278 toward the 1.3778 level. Therefore, during the New York session this major pair continued trading in a bullish mood and the price reached new daily high at 1.3387 level. Today during the early Asian session the EUR/USD pair has finished developing of the (1) impulsive wave (coloured green) at the level of 1.3397 and we are expecting to see the price below 1.3200 level soon. In accordance with our wave rules and taking into account that the wave 2 should retrace 61.8 % of the wave 1, we can define the potential targets with measuring wave 1 with take profit at 1.3149 (61.8% of wave 1). To reduce the risk, we can use invalidation at 1.3397 level as stop loss.

Support and Resistance
(S3) 1.3186 (S2) 1.3227 (S1) 1.3303 (PP) 1.3344(R1) 1.3420 (R2) 1.3461 (R3) 1.3537

Trading Forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movement. That is why short positions at level 1.3340 with stop loss 1.3397 and take profit at 1.3149 are recommended.