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EUR/USD Elliott Wave
Last week the EUR/USD pair was trading in an upward move developing corrective (C) wave (coloured Green) of the bigger (4) wave (coloured orange). During the Friday European session, we could observe a strong ascending movement from 1.2493 towards the 1.2595 level. Therefore, during the early New York session the EUR/USD pair continued trading in a bullish mood and the price reached a new high at 1.2637 level and we can consider this move as the end of the 5 impulsive wave (coloured blue) of the bigger (C) wave (coloured green). At the moment the EUR/USD pair is trading around 1.2570 level and we are expecting to see the price around 1.2000 this week. In accordance with our wave rules and taking into account that the wave 5 retraces 161.8% of the wave 1, we can define the potential targets with measuring 1 wave, with Take Profit 1 at 1.1981 (138.2% of wave 1) and Take Profit 2 at 1.1869. To reduce the risk, we can use the end of the 4 wave at 1.2637 level as Stop Loss. Also it is necessary to monitor the EU Spanish Manufacturing PMI, Italian Manufacturing PMI and ECB President Draghi Speaks data that can change the rate of the pair.
Support and Resistance
(S3) 1.2423 (S2) 1.2478 (S1) 1.2512 (PP) 1.2567 (R1) 1.2622 (R2) 1.2656 (R3) 1.2711
Trading Forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movement. That is why short positions at level 1.2550 with Stop Loss 1.2637, Take Profit 1 1.1981 and Take Profit 2 at 1.1869 are recommended.
