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EURUSD Elliott Wave Analysis: Bearish Reversal

By: Gregor Horvat | Monday, January 6, 2014

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.

EURUSD 4h

EUR/USD 4-Hour Chart

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.

EURUSD Daily

EUR/USD Daily Chart

 


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Author: Gregor Horvat

Gregor Horvat
www.ew-forecast.com

Gregor Horvat

Grega is based in Slovenia and has been involved in markets since 2003. He is the owner of www.ew-forecast.com, but before that he was working for Capital Forex Group and TheLFB.com. His feature articles have been published on: SafeHaven.com, FXstreet.com, Thestreet.com, Action forex, Forex TV, Istockanalyst, ForexFactory, Fxtraders.eu, Insidefutures.com, etc. He recently won the award on FXStreet.com for Best Forex Analysis in 2016. At www.ew-forecast.com he helps clients and educate them about the Elliott wave prinicple and how to label and track unfolding patterns in real time.  His approach to the markets is mainly technical. He uses a lot of different methods when analyzing the markets such as candlestick patterns, MA, technical indicators etc. His specialty however is Elliott Wave Theory which could be very helpful especially if you know how to use it in combination with other tools/indicators.

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