EURUSD has carved a potential top around 1.2010 levels on September 01, 2020. The currency continues to remain under control of bears and might be unfolding a complex correction as prices oscillate between 1.1750 and 1.1900 levels. Ideally, bears should be able to hold below 1.2010.
EURUSD had dropped through 1.0636 in March and since then has managed to rally through 1.2010 levels respectively. The probable wave counts are as follows: The rally between 1.0636 and 1.2010 is sub-divided into 5 waves, making an impulse Wave (1) on the chart here.
Ideally the impulse rally should be followed by a corrective drop, potential Wave (2) towards 1.1100 zone. Also note that the previous Wave 4 termination of one lesser degree is seen towards 1.1167 levels. Wave (2) might terminate close to 1.1167 mark going forward.
Further, the fibonacci 0.618 retracement of the entire rally between 1.0636 and 1.2010 is also seen towards 1.1160 levels. High probability remains for a bullish bounce, if prices manage to reach there. Bulls might be poised to be back in control around 1.1100/60 one.
Looking at the lower degree wave counts, EURUSD might have carved Wave 1 between 1.2010 and 1.1754 respectively. It is not labelled on the chart here. Since then, a counter trend rally might be underway towards 1.1900/30 mark to carve a potential Wave 2.
Traders might be preparing to sell around 1.1900/30 mark, with a protective stop above 1.2010 and projected targets towards 1.1100/50 going forward.
Technical Analysis Team
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