EURUSD Carves Lower Top Around 1.1930

31 August 2020

EURUSD might be preparing to drop lower towards 1.1200 levels at least. The currency had produced a whipsaw price action last week over the Jackson Hole Symposium. The volatility was in line with expectations and it managed to test resistance around 1.1920/30 mark.

EURUSD proposed wave structure is as follows: The currency had dropped from 1.2555 highs in February 2018 through 1.0800 levels in September 2019. The drop has not been displayed on the chart here. The subsequent price action suggests of a corrective flat.

Since 1.0800 mark, EURUSD seems to have carved a 3-3-5 expanded flat wave structure. The last leg of an expanded flat unfolds into 5 waves (impulse), giving an impression of the beginning of a new trend. The structure seems to be complete around 1.1965 levels.

If the above larger degree wave structure holds, EURUSD would decline from here and push towards 1.1200 at least. Potential remains for a continued drop towards parity and the wave structure could be that of an impulse.

Going further, the lower degree waves are also suggesting a potential Wave 1 and 2 in place at 1.1754 and 1.1930 levels respectively. If correct, a similar degree Wave 3 should unfold from here and drag prices sharply lower towards 1.1403 as highlighted on the chart here.

Traders might be preparing to initiate fresh short positions from here with protective stops above 1.1965 mark and projected targets below 1.1200 levels, going forward. Only a break above 1.1965 would delay matters further.

Prepared by
Technical Analysis Team

Disclaimer: This information has been produced by a third party, for general information purposes only, and is not indicative of future results. Abans Global takes no responsibility for its accuracy or completeness. Any opinions expressed do not reflect those of Abans Global. This information does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should seek independent advice before making investment decisions. Reproduction of this information, in whole or in part, is not permitted. Please note: If you are a Professional client, you are not eligible for negative balance protection and you could lose more than your initial deposit.

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