FX.co ★ EUR/USD Wave Analysis for September 19,2012

EUR/USD Elliott Wave
Since our last analysis the EUR/USD pair was trading in downward move, developing corrective (4) wave (coloured green) of the bigger (5) wave (coloured orange). During the Asian and European sessions, we could observe a descending move from 1.3118 towards the 1.3040 level. Therefore, during the New York session, this major pair continued trading in a bearish mood reaching a new daily low at 1.3029 level and we can consider this move as the end of the corrective (4) wave (coloured green). At the moment, the EUR/USD pair started developing final (5) wave and we are expecting to see price around 1.3205 level soon. In accordance with our wave rules and taking into account that the wave 5 should retrace 100% of the wave 1, we can define the potential targets with measuring 1 wave, with Take Profit 1 at 1.3207 (100% of wave 1) and Take Profit 2 at 1.3317 (161.8% of wave 1). To reduce the risk, we can use invalidation at 1.2936 level as Stop Loss.
Support and Resistance
(S3) 1.2974 (S2) 1.3009 (S1) 1.3031 (PP) 1.3065 (R1) 1.3100 (R2) 1.3122 (R3) 1.3156
Trading Forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the upward movement. That is why long positions at level 1.3090 with Stop Loss 1.2936 ,Take Profit at 1.3207 and Take Profit 2 at 1.3317 are recommended.