EURUSD Elliott Wave Analysis: Bearish Reversal
Last week we have seen some nice moves in the direction of a stronger USD which could stay in play for this week as well, but before USD goes higher or EUR and CHF falls deeper, we need a corrective retracement on the intraday basis.
EURUSD is trading nicely to the downside since start of the year, away from that 1.3900 swing high where we think that EURUSD formed a top. Notice that recent leg down from 1.3818 looks sharp that has extended through the channel support and through 1.3615 swing low as well, that should be an important sign for a changed trend. With that in mind, we think that EURUSD will stay under pressure and that pair is now making five waves down in red wave 1). At the moment pair is falling but probably in final stages of a subwave 3 that may form a low around current 161.8% Fibonacci extension level.
On a daily chart we can see an ending diagonal possibly completed after recent fall towards the lower side of the pattern. We however still need a decisive break of that trend line connected from wave 2) low that will be a confirmation for a change in trend.
Written by www.ew-forecast.com