EURUSD Elliott Wave Analysis: Corrective Rally
EURUSD moved higher on Friday which should not be a surprise as we know that after every five waves correction follows. We can count impulse down in red wave 1) so current upward reaction is normal. We are tracking wave 2) that represents a contra-trend reaction that should be made by three legs. We will be tracking A-B-C waves up to 1.3700-1.3750 region from where pair could turn down again, back to 1.3543. Critical, or invalidation level remains at 1.3891; as long it will hold, trend is down.
Regarding the USD bullish view our primary pairs to track are still USDCHF, GBPUSD and EURUSD. However, based on the latest structure the USD may not turn immediately higher against the EUR as we suspect that pair is in the middle of an A-B-C retracement now. We expect wave B down to 1.3600 and then another leg above 1.3700 before pair may turn south.