Wave Analysis:

During yesterday’s trading session the EUR/USD pair rebounded from the level of 1.2825. It began its upward move by 120 points but it did not reach the level of 1.2950. The whole downtrend which has been developing from the high of October 5 (1.3070) can be interpreted as a range of abc waves as well as incomplete five-wave structure. Thus, if the rate growth continues, then the pair will be involved in the building of a new horizontal correction. Meanwhile, if it resumes its descending move, it will complete wave c, which first target may be at the level of 1.2760.

Targets for Up Wave 5 in c:

1.2836 – 50.0% of Fibonacci
1.2758 – 61.8% of Fibonacci

Targets for Wave 4 in c or New Uptrend:

1.3011 – 23.6% of Fibonacci

Summary and Trading Recommendations:

The formation of the correctional trend continues at the moment. Wave continues its building from downtrend. The quotes growth, presumably in terms of wave 4 in c towards the level of 1.3011 which is equal to 61.8% of Fibonacci may break the current wave formation. However, the beginning of the down move may denote building of wave 5 in c with targets at 1.2836 and 1.2758 corresponding to 50.0% and 61.8% of Fibonacci. There are still no channels or divergences of MACD.