Today morning EURUSD has hit exactly the 61,8% retracement of the 1,28-1,3071 move. As one can see in the chart we have posted, 5 waves up have been made from the low, followed by 3 waves down. The 61,8% retracement is the most common place for a correction to end after 5 waves. Bulls should be worried if the 76,4% retracement (1,2865) is broken, but will become more confident if the intermediate high (or wave B) is broken upwards. After a sequence of 5 impulsive waves and 3 counter trend waves, another 5 wave impulsive move is expected. As we mentioned last time in our EURUSD post, the bigger downward sloping trend channel had been broken at 1,29. It coincided with wave 2 that back tested the broken channel. Then a rally followed towards 1,3070 where the move ended 5 waves up. This downward move should stay above 1,28 since according to Elliott wave rules, it cannot be a correction and at the same time move past the start of wave 1. The pattern up to now makes us confident that the upward trend will resume soon. 1,28 level should hold at any cost although initial warning signs will be given if the 76,4% retracement is violated.
Thank you for taking the time to read my thoughts.
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