FX.co ★ EUR/USD Pushing Lower Today - Analysis for July 12, 2012

EUR/USD Elliott Wave
Last week the EUR/USD pair was trading in a downward move developing impulsive wave (3) (coloured green) of the bigger 5 wave (coloured orange). Yesterday during the Asian and European sessions we could observe an ascending movement towards the 1.2296 level. Therefore, during the New York session this major pair did not manage to hold this level and price was pushed down reaching a new 2 years low at 1.2211 level. At the moment we are in the 5 wave (coloured blue) of the bigger (3) wave (coloured green) and we are expecting to see the price around 1.2150 level today. In accordance with our wave rules and taking into account that the wave 3 retraces 161.8% of the wave 1, we can define the potential targets with Fibonacci extensions (1.2742-1.2408-1.2692) with Take Profit at 1.2149 (161.8% of wave 1). Resistance point at 1.2255 can be used as Stop Loss point. Also it is necessary to monitor the U.S. Unemployment Claims, Import Prices m/m, Federal Budget Balance, FOMC Member Williams Speaks and EU ECB Monthly Bulletin, Industrial Production m/m, ECB President Draghi Speaks data that can change the rate of the pair.
Support and Resistance Levels
(S3) 1.2165 (S2) 1.2197 (S1) 1.2217 (PP) 1.2249 (R1) 1.2281 (R2) 1.2301 (R3) 1.2333
Trading Forecast
Proceeding from Elliott Wave rules this week, the trend is expected to begin the downward movement. That is why Short positions at level 1.2200 with Stop Loss at 1.2255 and Take Profit at 1.2149 are recommended.