EURUSD seems to have carved a potential top around 1.1915 mark over the last week. The currency had since dropped through 1.1755 levels and could be on its way to break below 1.1700 going forward. Bears looking poised to take control back from here.
EURUSD probable wave counts are as follows: The rally from 1.0636 through 1.1915 seems to have unfolded into 5 waves. It could be a part of the expanded flat 3-3-5 corrective wave structure that had begun in February 2020.
The structure looks complete around 1.1915 or could print through 1.1970 before reversing lower again. If the above proposed wave counts hold well, EURUSD could be on its way lower towards 1.1167, the previous Wave 4 termination.
Furthermore, the Elliott Wave Channel has also been tested for Wave 5 extension and prices have reversed lower. High probability remains for a bearish continuation from here and a break below 1.1700 levels would be encouraging.
Also note that EURUSD has tested the fibonacci 0.618 retracement of its earlier drop between 1.2555 and 1.0636 respectively. A bearish reversal here could send EURUSD lower below the 1.0636 mark as well, going further.
Traders might remain poised to initiate fresh short positions as close towards 1.1850/60 mark, with potential stop above 1.1950 levels. The projected target remains 1.1167 at least, and a break below 1.1700 would confirm.
Technical Analysis Team
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