_source!.png)
EUR/USD Elliott Wave
Last week the EUR/USD pair was trading in a downward move developing (3) (coloured green) of the bigger wave (5) (coloured orange). Yesterday during the Asian and European sessions, we could observe a descending movement towards the 1.2175 level. Therefore, during the early New York session, the EUR/USD pair failed to hold this level as a result the price pushed higher reaching a new daily high at 1.2289 level. Today during the Asian session, this major pair continued trading in a bullish mood and the price is currently trading around 1.2295 level. At the moment we are in the corrective (4) wave so we need to be prepared for the final (5) wave (coloured green) of the bigger (5) wave (coloured orange). In accordance with our wave rules and taking into account that the wave 5 retraces 100% of the wave 1, we can define the potential targets by measuring 1 wave with Take Profit 1 at 1.2116 (78.6% of wave 1) and Take Profit 2 at 1.2045 (100% of wave 1). Invalidation point at 1.2405 point can be used as Stop Loss point. Also it is necessary to monitor the UK CPI y/y, RPI y/y, BOE Gov King Speaks, BOE Inflation Letter, EUR German ZEW Economic Sentiment, ZEW Economic Sentiment and U.S. Core CPI m/m, CPI m/m, TIC Long-Term Purchases, Capacity Utilization Rate, Industrial Production m/m, Fed Chairman Bernanke Testifies data that can change the rate of the pair.
Support and Resistance
(S3) 1.2130 (S2) 1.2174 (S1) 1.2201 (PP) 1.2245 (R1) 1.2289 (R2) 1.2316 (R3) 1.2360
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 1.2340 with Stop Loss 1.2405, Take Profit 1 at 1.0216 and Take Profit 2 at 1.2045 are recommended.
