EURUSD Resistance Intact At 1.1420

13 July 2020

EURUSD holds below the resistance marked at 1.1420 (not seen here). After having carved a lower high around 1.1370 mark over the last week, EURO had reversed sharply. It had dropped to 1.1250 levels and also broke immediate support at 1.1260.

Let us re-look at potential wave counts here: The drop from 1.1420 through 1.1167 could be labelled as potential Wave 1/A. The subsequent rally towards 1.1365/70, was a bit complex and corrective a-b-c, which is marked as potential Wave 2/B.

Also note that the corrective Wave 2/B has reached the fibonacci 0.786 retracement of the earlier drop (Wave 1/A), a typical guideline for Wave 2. If the above counts are correct, EURUSD should stay below 1.1420 mark and head lower towards 1.0930 at least.

Interim support is marked around 1.1167 for now and a break lower would confirm EURUSD pushing towards 1.0930 levels. Interim resistance stays around 1.1365/70, and prices should ideally stay below that handle, going forward.

Looking at the recent wave structure, the drop between 1.1365/75 and 1.1250 is also an impulse, marked as potential lower degree wave i. The subsequent rally has reached fibonacci 0.618 retracement of earlier drop, marked as wave ii.

If the above lower degree waves are correct, EURUSD should stay below 1.1365/70 and reverse lower towards 1.0930 and further. A break below 1.1167 would be encouraging for bears. Most traders might want to remain short against 1.1420 for now.

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