EUR/USD: Technical Analysis

The dramatic decline of the last few days has slowed after alighting on the 50 day MA and a small countertrend rally has begun from this morning’s lows. There is a high probability that this is an Elliot wave 4 correction of yesterday’s decline. The majority of wave 4’s end in a retracement zone of 20-50% of 1-3 and so this 4 could reverse at any moment given we have retraced over 20% already. The 50% level is particularly interesting because it is exactly at the same point as the 20th October low, thus enhancing its value as resistance. Once 5 down gets underway it could match the lows at 1.3593 but caution ought to be exercised as we are at strong support levels. The correction which follows may be strong taking us back up to 1.3815.




Analysis by: Forex4you.com written by Joaquin Monfort
Forex4you analyst

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