EURUSD had hit 1.2010 mark early last week before finding resistance. It reversed sharply towards 1.1780 before pulling back higher again. EURO might have print a meaningful top and should drop lower towards 1.1150 at least in the next few weeks.
EURUSD had dropped to fresh lows in March 2020 (1.0636, not seen here). The currency has rallied through 1.2010 highs clearly sub dividing into 5 waves (impulse). According to the general guideline of the wave principle, a 5 Wave rally is followed by a 3 Wave drop.
Ideally, EURUSD might be preparing for a similar degree corrective drop towards 1.1150 levels at least. Also note that previous Wave 4 of one lesser degree also terminated around 1.1167, making it a high probability bounce, going further.
Further, the fibonacci 0.618 retracement of entire rally between 1.0636 and 1.2010 is also seen around 1.1160 mark. If the corrective wave unfolds towards 1.1150/60 mark, EURUSD bulls might be poised to be back in control.
An alternate scenario could be as follows: The recent rally between 1.0636 and 1.2010 might be the last wave of a potential expanded flat correction. The bearish boundary in question could be between 1.2555 and 1.0830 respectively.
If the alternate count holds true, EURUSD might turn bearish from here and resume a new trend that could extend below 1.0636 mark. Traders might be prepared either ways and remain short against 1.2010 resistance , going further.
Technical Analysis Team
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