EUR/USD Elliott Wave
For the last few days the EUR/USD pair was trading in an upward move developing 5 wave (coloured blue) of the bigger corrective (C) wave (coloured green). Yesterday during the early Asian and European sessions we could observe an ascending movement from 1.2523 towards the 1.2564 level. Therefore, during the New York session this major pair did not manage to hold this level and price started pushing lower reaching a new 2 days low at 1.2488 level. At the moment the EUR/USD pair is trading around 1.2565 level and we are expecting to see the price lower today. In accordance with our wave rules and taking into account that the wave 5 retraces 161.8% of the wave 1, we can define the potential targets by measuring wave 1, with Take Profit at 1.1884 (161.8% of wave 1). To reduce the risk, we can use resistance at 1.2690 as Stop Loss. Also it is necessary to monitor the EU German Retail Sales m/m, CPI Flash Estimate y/y, Unemployment Rate and U.S. Chicago PMI, Revised UoM Consumer Sentiment, Fed Chairman Bernanke Speaks, Factory Orders m/m, Jackson Hole Symposium data that can change the rate of the pair.
Alternation: Wave 5 (coloured blue) of the bigger (4) wave (coloured orange) is still in the progress and we can expect to see price around 1.2680 level today.
Support and Resistance
(S3) 1.2442 (S2) 1.2471 (S1) 1.2489 (PP) 1.2518 (R1) 1.2547 (R2) 1.2565 (R3) 1.2594
Trading Forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movement. That is why short positions at level 1.2520 with Stop Loss 1.2690 and Take Profit 1.1884 are recommended.