EUR/USD Elliott Wave
Since our last analysis the EUR/USD pair was trading in a downward move developing corrective wave C (coloured blue) of the bigger wave (2). During the European session we could observe a strong ascending movement from 1.2215 towards the 1.2400 level. Therefore, during the New York session the EUR/USD pair did not manage to hold this level and price fell to the new 5 days low at 1.2132 level (end of the C wave). Today we can observe the beginning of the (3) impulsive wave and we are expecting to see price higher today. In accordance with our wave rules and taking into account that the wave 3 retraces 161.8% of the wave 1, we can define the potential targets with Fibonacci extensions (1.2041-1.2390-1.2132) with Take Profit 1 at 1.2480 (100% of wave 1) and Take Profit 2 at 1.2695 (161.8% of wave 1). To reduce the risk we can use Invalidation point at 1.2041 as Stop Loss. Also it is necessary to monitor the EU Retail Sales m/m and U.S. Non-Farm Employment Change, Unemployment Rate, Average Hourly Earnings m/m, ISM Non-Manufacturing PMI data that can change the rate of the pair.
Support and Resistance
(S3) 1.1968 (S2) 1.2071 (S1) 1.2135 (PP) 1.2239 (R1) 1.2342 (R2) 1.2406 (R3) 1.2510
Trading Forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the upward movement. That is why long positions at level 1.2235 with Stop Loss 1.2040, Take Profit 1 1.2480 and Take Profit 2 at 1.2695 are recommended.