EUR/USD: fractal analysis - downward movement

We are currently in the middle of an interesting situation. The two scenarios mentioned in the previous forecasts are both possible. Besides that, there's some uncertainty in the market due to the lack of significant economic data for the last two days. So, fractal analysis can be used not only to project high-probability price movements, but also to detect the periods of uncertainty.
Today is likely to be rich in significant economic reports. Traders should pay special attention to the US employment data and trade balance. US retail sales index will be in the spotlight tomorrow, on Friday.

The generator is 95% sure, that low at 1.3860 will be eventually breached and the price will proceed to 1.37. (main outlook), the alternative scenario has been described in the previous forecast.

EUR/USD: technical analysis

Support 1.3850/40 was breached, which gave more reasons to expect level 1.3740/20, mentioned previously, to be tested. Trading is currently carried out at 1.3830/40. But the breakout is not enough. The "bears" have to hold the price below 1.3850/40 as well, which they are now trying to accomplish. Indicators are turned down, anticipating further "bearish" trend. At the same time, support 1.3780 is one more barrier, that stands in the way to the target, which breakout would indicate the "bearish" victory and suggest to expect level 1.3740/20 test in the near future. It's worth noting, that a down trend may extend to even lower levels, below the previously mentioned target.


EUR/USD: technical analysis

EUR/USD has fallen heavily to support at 1.3805 from where it has bounced back temporarily but we will probably get a retest of the 1.3805 lows as wave 4 finishes and then possibly a reversal and rally higher as Elliot wave 5 gets underway. There is substantial resistance at 1.3800 from the trendline of the whole move up from early January and this could provide the necessary platform from which to mount the rally.

Analysis by: Joaquin Monfort
Forex4you analyst

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