EURUSD had dropped through 1.1668 mark on Tuesday before finding some support. The currency held above 1.1660 interim support, keeping its standard flat corrective structure intact. A push above 1.1750 would be encouraging to bulls.
EURUSD might be still working on a corrective wave towards 1.2050-1.2100 zone since 1.1660 lows carved on August 20. The preferred wave count remains potential Waves ‘a’ and ‘b’ in place around 1.1910 and 1.1768 levels respectively.
If the above is correct, EURUSD might be well underway towards 1.2050 as wave ‘c’ unfolds. Also note that 1.2050 is close to fibonacci 0.618 retracement of the drop between 1.2266 and 1.1660. Hence the probability for a bearish reversal remains high.
Structurally EURUSD is in a larger degree corrective wave lower towards 1.1300, against 1.2350 high. It has carved Waves (A) and (B) around 1.1704 and 1.2266 levels and since then Wave (C) might be underway towards 1.1300.
Alternatively, Wave (C) might be complete around 1.1660 mark since the drop between 1.2266 and 1.1660 is in five waves. If correct, EURUSD bulls would remain poised to come back in control from here, pushing above 1.2350 in the next few weeks.
Either way, EURUSD might be preparing for a counter trend rally towards 1.2050-1.2100 zone at least. Traders might want to initiate long positions against 1.1660 mark.
Prepared by
The Profinacademy.com Team
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