EUR/USD started a new bullish momentum which could be part of a wave 5 continuation. Today we will check the pair from wave perspective to figure the best available opportunity.
This article will discuss the expected scenarios for the pair during the coming days.
Is EUR/USD Starting Wave 5?
This currency pair has been in a strong uptrend for more than a year as we can see on the daily chart below.
Here are the 3 main conclusions:
- The pair finished the ABC of wave 4.
- I’m expecting wave 5 to end above wave 3.
- Wave 5 target is around -27.2 Fibonacci level at +/-1.2750.
4 Hour Chart
We need to take a fast look at 4 hours chart to know what is going on in the smaller time frames.
The 4 hour chart presents these main conclusions:
- Wave 5 of the daily chart is composed of 5 waves on the smaller chart.
- The pair is now in wave 2 on the 4 hour chart.
- A break above 1.2350 makes the start of wave 3 likely.
- Wave 3 is expected to be the longest wave, so EUR/USD could show strong bullish momentum.
As we see the pair is preparing for a bullish momentum waiting for some small confirmations to set our position.
EUR/USD 4 Hours Chart Using SWAT Software
SWAT charts indicate a start of bullish price action as price is trying to stay above the 144 EMA, but to set our setup we need to see the below confirmations:
- Lower time frames already look ready for a bulllish breakout, but we need the price to break above the 21 EMA with a strong candle for a 4 hour confirmation.
- Another factor is for price to break the last fractal.
Our first target will be WIZZ level 3 at 1.2417 and WIZZ level 4 at 1.25062 as the second target.
For the stop loss, I prefer to keep it under the last bottom.