EUR/USD Elliott Wave
Since our last analysis the EUR/USD pair was trading in a downward move, like we expected, developing 1 wave (coloured blue) of the bigger wave (1) (coloured green). Yesterday during the European and New York sessions we could observe a descending move from 1.2627 towards the 1.2554 level and we can consider this move as confirmation of the beginning of 3 wave (coloured blue). At the moment, this major pair is trading around 1.2535 level and we are expecting to see the price around 1.2360 level soon. In accordance with our wave rules and taking into account that the wave 3 should retrace 261.8% of the wave 1, we can define the potential targets with Fibonacci extension (1.2638-1.2567-1.2627), with Take Profit at 1.2424 (261.8% of wave 1). To reduce the risk, we can use invalidation at 1.2559 level as Stop Loss. Also it is necessary to monitor the EU Retail Sales m/m, German 10-y Bond Auction and U.S. Revised Nonfarm Productivity q/q, Revised Unit Labor Costs q/q data that can change the rate of the pair.
Support and Resistance
(S3) 1.2509 (S2) 1.2537 (S1) 1.2554 (PP) 1.2582 (R1) 1.2610 (R2) 1.2627 (R3) 1.2655
Trading Forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movement. That is why short positions at level 1.2500 with Stop Loss 1.2559 and Take Profit at 1.2424 are recommended.