FX.co ★ EUR/USD Wave Analysis for August 14,2012

EUR/USD Elliott Wave
Since our last analysis, the EUR/USD pair was trading in an upward move, like we expected, developing impulsive 3 wave (coloured blue) of the bigger (3) wave (coloured green). During the European and the first half of the New York sessions we could observe an ascending movement from 1.2270 towards the 1.2373 level. Therefore, during the second half of the NY session this major pair did not manage to hold this level and the price slipped towards the 1.2325 level. At the moment the EUR/USD pair is testing yesterday’s high and we are expecting to see continuation of the bullish mood 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 (1.2133-1.2441-1.2259) with Take Profit 1 at 1.2558 (100% of wave 1) and Take Profit 2 at 1.2754 (161.8% of wave 1). To reduce the risk, we can use support point at 1.2240 as Stop Loss.
Support and Resistance
(S3) 1.2208 (S2) 1.2251 (S1) 1.2278 (PP) 1.2321 (R1) 1.2364 (R2) 1.2391 (R3) 1.2434
Trading Forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the upward movement. That is why long positions at level 1.2375 with Stop Loss 1.2240, Take Profit 1 1.2558 and Take Profit 2 1.2558 are recommended.