EURUSD Potential Reversal Seen Against 1.1965

24 August 2020

EURUSD seems to have finally carved a potential top around 1.1965 levels over the last week post FOMC. This was in-line with expectations as bears regained control from the above mark. Going forward, a series of lower lows and lower highs are expected towards 1.1200 at least.

EURUSD probable wave structure is as follows: The currency has completed a 5 wave rally from 1.0636 lows through 1.1965 highs respectively. Ideally, a corrective wave should be followed from here on, which could drag prices lower towards 1.1200 handle.

Additionally, please note that the recent rally from 1.0636 through 1.1965 could be a part of a larger degree corrective structure. In that case, EURUSD might continue drifting lower below 1.1200 handle going forward. The probabilities remain high for above count.

Either way, the most probable trade direction from here is on the south side as long as prices stay below 1.1965 mark. The currency might produce a corrective drop or continue lower as an impulse but bears are looking in control for now.

Looking further on the shorter time frames, EURUSD might have completed Wave 1 (not labelled here) lower towards 1.1754 on Friday. If the above structure holds well, the currency might be unfolding Wave 2 counter trend rally for now.

Traders might be preparing to sell higher on potential termination of the counter trend rally towards 1.1900 handle. The protective stops should go above 1.1965, while projected targets are below 1.1200 levels at least. Looking lower from here on.

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