Daily Forex Outlook: EUR/USD

The chart shows the movement started from 1.4718 (18 December). I think it is corrective in nature and is in the position of wave B or wave 2 of one higher degree. In both cases I will expect a new high above 1.4718 later. Currently the big question is how deep will turn out to be the current correction. If it is wave 2 it could be enough but if we deal with wave B, the euro should fall further at least to 1.3370 (61.8 % retracement of the rise started from 1.2549 (4 December)). With an eye on the current uncertainty I exited today my previous short position opened a week ago and my intention is to seek an entry level for a strategic long position in coming days. From a short term point of view one could expect some recovery after today's sell-off but I don't expect at this stage a rise above 1.3805 (61.8 % retracement). Only a sharp rise above today's high in the next 24 hours will be a bullish signal. However my experience tells me that currently the most likely scenario is some recovery followed by another low below today's till the end of the week.

Trading strategy: 07:39 EST; 12:39 GMT
Short position from 1.4192
Exit the short position at market (1.3580) with profit 612 pips
Stand aside

Trading strategy: 02:38 EST; 07:38 GMT
Short position from 1.4192, move the stop loss from 1.4365 to 1.3967 (stop and reverse), target - 1.3485

Karoll Financial House

This analysis has only informational and educational purpose and does not represent a proposal for buying or selling currency contracts. This report will be updated every Monday, Wednesday and Friday on the next schedule:

• Daily EUR/USD Elliott Wave Outlook - Monday
• Daily GBP/USD Elliott Wave Outlook - Wednesday
• Daily USD/JPY Elliott Wave Outlook - Friday

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