Sentiment in EURUSD is very bearish and I see everyone expecting this pair to move towards 1.05 or even parity right away. I do not think this is the case. I believe in the road towards 1.05 we should see some strong bounces in order for some EURO bears get eliminated. Currently I see 5 waves down complete from 1.1490 to 1.0890. The bounce so far has been weak and has not even touched the 38% Fibonacci retracement. I believe we are in wave B of this bounce and we should soon reverse upwards as wave C towards minimum target of 38% Fibonacci retracement.
I expect EURUSD to bounce towards and inside the 4 hour Ichimoku cloud area and touch the 38% Fibonacci retracement resistance. This is the minimum bounce area I expect to be reached. Stochastic is at oversold levels and a bounce is expected to start from current levels as it did the last time the stochastic reached same oversold levels.
In the daily chart we have broken below the upward sloping trend line and the stochastic is in oversold levels. A bounce is justified and once the stochastic moves inside the overbought area I will be looking to open short positions targeting 1.05-1.02.
As always, thank you for taking the time to read my latest post.