the EUR/USD made a bullish bounce at the previous bottom and 88.6% Fibonacci retracement level. The main question is whether price is building a bullish pullback in the downtrend OR is the EUR/USD ready for a larger bullish reversal? Check out the wave images below for the key patterns and S&R levels.
The EUR/USD has probably completed a deep wave B (dark red) pattern but a break below the support trend line invalidates this wave pattern and indicates an immediate downtrend continuation. Price would need to break above the resistance trend lines (red) before a larger bullish reversal (green arrows) can become confirmed. In that case, a bullish breakout is expected to reach the Fibonacci levels of wave Y vs W.
The EUR/USD bounced at the deep 88.6% Fibonacci retracement level of wave B vs A but it is unclear at the moment whether price will indeed reverse higher or whether price will actually continue with the downtrend. The support (blue) and resistance (red) trend lines play a key role in this equation and can help decide whether price is building a bullish reversal or a bearish continuation. For more daily wave analysis and updates, sign-up up to our ecs.LIVE channel.
Good trading, Chris Svorcik