EUR/USD Elliott Wave Analysis
EUR/USD – 1.4394
EUR/USD: Wave v of (c) ended at 1.5145 and fall to 1.4015 is underway
The single currency finally dropped to another 3-month low of 1.4218 last week in line with our expectation, however, as euro has recovered from there, suggesting a minor wave iii of the decline from 1.5145 has ended there and minor consolidation would take place in wave iv and recovery to 1.4500 is likely, however, renewed selling interest should emerge around 1.4625/30 and 1.4680 (50% Fibonacci retracement of 1.5142 to 1.4218) should hold, bring another decline in wave v later.
Our preferred count on the daily chart remains that a wave (B) from 1.2329 is unfolding with A-leg ended at 1.4720, followed by wave B at 1.2457, the wave C from there is also a 3 legged move and is labeled as (a): 1.3739, (b): 1.2885, the wave iii of the 5-waver (c) from 1.2885 has ended at 1.4339 and wave iv is a triangle ended at 1.3878 and wave v has ended at 1.5145.
Below 1.4218 would extend weakness to 1.4175/80, then eventually towards 1.4007-15 (previous support and 50% Fibonacci retracement of 1.2885-1.5145).
On the upside, above 1.4625/30 (previous support turned resistance) would suggest the first leg of decline from 1.5145 has ended, then gain towards 1.4785/95 (61.8% Fibonacci retracement of 1.5145 to 1.4218) would follow, however, still expect upside to be limited to 1.4900 and euro shall falter below 1.5000 and bring another selloff.
Euro’s long-term uptrend started from 0.8228 (26 Oct 2000) with an impulsive structure. The rise from 0.8228 to 0.9593 (5 Jan 2001) is labeled as wave I, the retreat to 0.8352 (6 Jul 2001) is wave II and the rally to 1.3670 (31 Dec 2004) is wave III. Wave IV from there ended at 1.1640 (15 Nov 2005), the subsequent upmove to 1.6040 (July 15, 2008) is treated as wave V, the major selloff from the record high of 1.6040 to 1.2329 (October 27, 2008) signals a correction of the long-term uptrend has taken place with (A) leg ended at 1.2329 and once (B) wave finishes, wave (C) will take euro lower and below 1.2329 confirms and extends to 1.2136 (50% Fibonacci retracement) and 1.2000.
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