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EURUSD may have seen corrective high below 1.122

Friday's close produced my preferred candlestick patter, the Evening Star Reversal, to suggest a corrective high has been seen. 






Evening Star patterns are my favoured Candlestick pattern, particularly when they respect a zone of support or resistance. 

The fact it has stalled at a 100% projection (wave equality) does suggest we have seen the completion of a 3-wave move. 

Price has since moved below 1.11 and Friday's low to suggest near-term weakness with the next logical target around 1.10. At time of writing we hover above Thursday's low (a Hanging Man Reversal) but a break lower could target 1.10 fairly quickly. Here we find the Monthly pivot so an area which will likely hold as support upon first attempt as traders book profits. How it reacts here is key because if we do see price rally above 1.10 then we have to consider a break above 1.122 as part of another 3-wave move (Double Zig Zag). However a break below 1.10 should see price target the 1.08 lows and beyond as we begin an impulsive move lower. 


 

Matt Simpson | Senior Market Analyst
Forex CFDs Metals


Filed under: Dollar, Euro, EURUSD, Forex, FX, ThinkForex, Trading, USD



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