EUR/USD Elliott Wave
From the beginning of August the EUR/USD pair was trading in an upward move, developing impulsive 1 wave (coloured blue) of the bigger (3) wave (coloured green). Yesterday during the Asian and European sessions we could observer an ascending movement from 1.2375 towards the 1.2442 and we can consider this move as the end of the 5 wave of the bigger wave 1 (coloured blue). Therefore, during the New York session the EUR/USD pair did not manage to hold this level and the price retraced to the 1.2392 level. At the moment we can observe the beginning of the corrective 2 wave (coloured blue) and we are expecting to see the price around 1.2260 level soon. In accordance with our wave rules and taking into account that the wave 2 retraces 61.8% of the wave 1, we can define the potential targets with Fibonacci retracement (1.2134-1.2442) with Take Profit 1 at 1.2291 (50% of wave 1) and Take Profit 2 at 1.2254 (61.8% of wave 1). To reduce the risk, we can use resistance at 1.2440 as Stop Loss. Also it is necessary to monitor the EU German Industrial Production m/m, German 10-y Bond Auction and U.S. Prelim Nonfarm Productivity q/q, Prelim Unit Labor Costs q/q, Crude Oil Inventories, 10-y Bond Auction data that can change the rate of the pair.
Support and Resistance
(S3) 1.2339 (S2) 1.2364 (S1) 1.2380 (PP) 1.2405 (R1) 1.2430 (R2) 1.2446 (R3) 1.2471
Trading Forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movement. That is why short positions at level 1.2360 with Stop Loss 1.2440 Take Profit 1 1.2291 and Take Profit 2 at 1.2254 are recommended.