EUR/USD Elliott Wave Analysis

EUR/USD – 1.3701

EUR/USD: Wave v of (c) ended at 1.5145 and fall to 1.3745/50 is underway

The single currency extended recent decline as suggested in our previous update, reinforcing our bearish count that wave v, wave (c) of wave C as well as larger degree wave (B) has ended at 1.5145 and our indicated downside target at 1.3747-48 (previous support and 61.8% Fibonacci retracement of 1.2885 to 1.5145) and 1.3644 (100% projection of 1.4580 to 1.4029 measuring from 1.4195) had been met last week and further weakness towards 1.3500 cannot be ruled out.

Our preferred count on the daily chart remains that a wave (B) from 1.2329 ended at 1.5145 with A-leg ended at 1.4720, followed by wave B at 1.2457, the wave C from there was also a 3 legged move and is labeled as (a): 1.3739, (b): 1.2885, the wave iii of the 5-waver (c) from 1.2885 has ended at 1.4339 and wave iv is a triangle ended at 1.3878 and wave v has ended at 1.5145.

Therefore, the decline from there is the beginning of the wave (C) with minor wave (i) of (C) ended earlier at 1.4218 with wave (ii) ended at 1.4580, hence wave (iii) has commenced from there with minor wave i of (iii) still in progress but is likely to be limited to 1.3405 (61.8% Fibonacci retracement of entire rise from 1.2329 to 1.5145), bring rebound in wave ii of (iii) later this month.

On the upside, expect recovery to be limited to 1.3851 (previous support turned resistance) and bring one more fall. Only above resistance at 1.4028 resistance would confirm the wave i of (iii) has ended, then correction in wave ii of (iii) for retracement to 1.4190/00.

Euro's long-term uptrend started from 0.8228 (26 Oct 2000) with an impulsive structure. The rise from 0.8228 to 0.9593 (5 Jan 2001) is labeled as wave I, the retreat to 0.8352 (6 Jul 2001) is wave II and the rally to 1.3670 (31 Dec 2004) is wave III. Wave IV from there ended at 1.1640 (15 Nov 2005), the subsequent upmove to 1.6040 (July 15, 2008) is treated as wave V, the major selloff from the record high of 1.6040 to 1.2329 (October 27, 2008) signals a correction of the long-term uptrend has taken place with (A) leg ended at 1.2329 and once (B) wave finishes, wave (C) will take euro lower and below 1.2329 confirms and extends to 1.2136 (50% Fibonacci retracement) and 1.2000