EURUSD Might Have Carved A Top Around 1.1909

3 August 2020

EURUSD might have carved a potential top around 1.1909 over the last week as bears remain inclined to take back control from here. The currency has dropped over 130 pips since then and is seen to be trading around 1.1770 levels.

EURUSD had dropped through 1.1740 levels during early hours of trade today before pulling back higher again. It might be changing its direction at a larger degree since February 2018 highs around 1.2555 levels.

EURUSD probable wave counts are as follows: The rally since 1.0636 lows in March can be sub-divided into clear 5 waves, making an impulse wave. Please note the 5th wave extended beyond the fibonacci 0.618 extension at 1.1675.

We have marked the 5th wave termination at 1.1909 peak over the last week. Normally a 5 wave rally should be followed by a 3 wave corrective drop. But in this case, EURUSD might have completed a probable expanded flat at 1.1909.

Furthermore, the currency has hit a major resistance just above the 1.1820 mark. This zone is marked by the fibonacci 0.618 retracement of precious drop from 1.2555, which began in February 2018. The drop between 1.2555 and 1.0636 has been retraced up to 61.8% at 1.1909.

If the above larger degree wave counts hold well, EURUSD might be preparing for a major reversal from current price action. Traders might be preparing to initiate fresh short positions around 1.1800 levels with stops above 1.1909 mark.

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