The EUR/USD is showing bullish daily engulfing twins at the support trend line (blue), which could confirm a larger bullish zigzag pattern.
The EUR/USD bullish breakout above the resistance trend line (red) could confirm the bullish breakout and zigzag pattern. The bullish zigzag could be part of a bearish wave B (purple) if price bounces at the Fibonacci retracement levels and return back to the same support zone.
The EUR/USD is expected to build a bearish ABC (purple) pattern. For the moment a larger wave B (purple) is expected before price moves lower.
Once the bearish ABC pattern on the weekly chart is finished, it is expected to complete a wave B (red). This wave pattern becomes invalidated once price breaks below the 100% Fibonacci level of wave B vs A. Even a break below the 61.8-78.6% Fib zone could already indicate that a long-term downtrend is more likely.
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