EURUSD has managed yesterday to break the 1.3110 barier after testing it for at least two times the past few sessions. On the eve of a rate cut by the European Central Bank and the FED meeting tonight, volatility is expected to rise. This FX pair has managed to rise from 1.2740 in early April to above 1.31 in the end of the month. This upward move consists of three parts. One upward move towards 1.32 that could be counted as an wave, a downward overlapping move towards 1.2960 where we showed how important support that was, and a third upward move that we are currently in. This entire price pattern could very well be an A-B-C upward correction to the entire decline from 1.37. This is depicted in the chart below.
EURUSD short-term trend remains up and first possible targets to end this upward move from 1.2960 are 1.3230 and 1.3345. These are also important Fibonacci retracements relative to the downward move from 1.37. Next target will be 1.3390 were wave C will be equal to wave A. Currently this is our favorite Elliott wave count. This implies a downward resumption of trend when wave C finishes. Breaking below 1.3110 will be the first sign that the upward correction has ended. Confirmation will come when prices fall below wave B low at 1.2955. For more help trading this FX pair, don’t hesitate to contact me.
As always, thank you for taking the time to catch up on my thinking.