the EUR/USD is testing the strong support zone at 1.12 for the fifth time in recent history. Will price finally be able to break below it or will the bulls keep control and send the EUR/USD back up?
In my view, the EUR/USD still has a better chance of making a bullish bounce at the 1.12 support zone (blue lines). The current wave outlook favor the end of the wave 2 (purple) after a WXY correction (blue). A bullish rally could make a wave 3 (purple) more likely but the real confirmation occurs if price is able to break above the resistance trend line (red). A break below the support lines invalidates the current wave pattern and indicates a potential downtrend towards 1.11 and 1.10.
The EUR/USD seems to be building a small bullish bounce after hitting the support trend line (blue) which could be a first wave 1-2 (blue) of a new direction. The current sideways movement could be explained by a lengthy WXY (blue) correction. A bullish breakout above the resistance trend line (red) could see price move up higher towards the Fibonacci targets of wave 3 vs 1.
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Good trading, Chris Svorcik