EURUSD is moving within bullish impulse from December 16 as expected based on Elliott wave theory.
EURUSD is in strong recovery since the end of September 2022, which we labeled as an impulse away from the lows. Well, on December 16th EURUSD came into projected and important 261,8% Fibonacci extension of wave 1 for wave 3, clearly within an extended five-wave bullish impulse, from where we have expected a corrective slow down within wave 4 before a continuation higher for wave 5.
December 16 Analysis:
- 261,8% Fibonacci extension of wave 1 is an ideal target for wave 3 that can be followed by a pullback in wave 4
After 4 weeks, we can see that EURUSD made a nice three-wave a-b-c corrective pullback in wave 4, from where we can already see it bouncing sharply within 5th wave with room even up to 1.09 – 1.10 area. Keep in mind that this is now final wave 5 of a bullish impulse from the lows, so we will have to be aware a higher degree of corrective slowdown, possibly later this month.
Updated January 11 analysis (full commentary)
“The US stock market did not produce any breakout yesterday. We see slow price action as traders and investors still await the US CPI report. While stocks are sideways, the USD is still looking lower, and it may see further weakness from here as many majors show just minor corrections within an uptrend. However, some dovish comments by ECB Governing Council member Mario Centeno said that rates-raising could be approaching the end. We are not convinced how they will fight 10% inflation then.
From an Elliott wave perspective, we see prices climbing higher into a fifth wave, now breaking to a new high, so there can be more upside. But there is still a chance for a setback and a retest of the channel near 1.07/1.0713 before recovery resumes. The ideal upward projection for a current intraday bull run is at 1.08/1.09.”
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