The EUR/USD pair might have formed a bottom and terminated into wave 4 of one lesser degree as shown here. The pair is seen to be trading around 1.2370/80 levels for now and looking to carve an impulse. A push through 1.2430/40 levels would confirm that the pair has carved an impulse from 1.2205 levels and that it should be looking to push higher to terminate in wave (5) of a larger degree. It should be noted that the pair has found support from convergence points of fibonacci 0.382 support and also the Elliott Channel Support as depicted here. Initial price support is seen at 1.2160 levels while interim resistance is at 1.2537 levels respectively. A push through 1.2537 would be close to completing wave (5) of a higher degree and initiate a major bearish reversal.
Please look to take short term profit on long positions taken earlier.
US Dollar Index:
The US Dollar Index seems to have terminated wave 4 around 90.50 levels earlier and should be on its way lower towards wave (5) of a higher degree. The US Dollar Index is seen to be trading around 89.50 levels at this point in time and should be looking to continue dropping lower below 88.40 levels at least to complete the 5th of 5th wave drop. Also note that the index has bounced off the Elliott Channel resistance and just shy of fibonacci 0.382 resistance of wave 3. Initial price resistance resumes from 91.00 levels while interim price support is seen at 88.40 levels respectively. Keeping the bigger picture in mind, looking for a drop and then going long should prove extremely beneficial trading strategy.
Please book short term profits on the short positions taken earlier.
Watch out for the German and Italian GDP data to be out today in the next 2-3 hours.
The material has been provided by InstaForex Company – www.instaforex.com