EUR/USD Strategic Levels For Bulls And Bears

Greetings friends, today I’m going to focus a little bit more on EUR/USD as I believe it is at a crucial turning point. Last week I posted here an analysis calling for a bullish wave scenario in the Dollar index. If you have been reading my daily US Dollar Index analysis you would have been informed of my 92.50 target. Price was reached yesterday and we got a reversal. Same with EUR/USD. I was targeting 1.1850-1.1950 and price yesterday reached 1.1960 and reversed below 1.19 right now. Price reached the 78.6% Fibonacci retracement of the entire decline and is now trying to break back below the 4 hour Ichimoku cloud support.

EUR/USD Daily CHart

EUR/USD 4 Hour Chart

The bearish pergence warning signs were shouted publicly on twitter the last couple days. So what EUR/USD bulls do not want to see and what Bears like me want to see in order to be more confident of our bearish EUR/USD (Bullish $) view? First sign would be for price to enter the red rectangle area. If this happens, in Elliott wave terms, the pull back we are currently in could not be a wave 4 correction. If the entire upward move from 1.1550 is just a 3 wave correction, then another 5 wave decline should follow that would need to break below 1.1550. 2nd level that we need to see broken is the last important low and the start of the recent upward move. This is shown by the black rectangle area at 1.17. Breaking below 1.17 the chances of my bearish EUR/USD scenario will increase dramatically, as the alternative wave scenarios that support a bullish EUR/USD, will get canceled.

We can not ignore the topping signs we have seen the last couple of sessions. EUR/USD is expected to move lower….but will it repeat the small pull back and upward reversal to new highs as the last 2 times or will it start a bigger trend lower towards 1.14? I believe the latter scenario is more probable.

EUR/USD 4 Hour Chart

Disclosure: None of the information or opinions expressed in this blog constitutes a solicitation for the purchase or sale of any security or other instrument. Nothing in this article constitutes investment advice and any recommendations that June be contained herein have not been based upon a consideration of the investment objectives, financial situation or particular needs of any specific recipient. Any purchase or sale activity in any securities or other instrument should be based upon your own analysis and conclusions.

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