EUR/USD jumped as high as 1.3757 in the final week of January. The pair stayed at that level for a short while on bearish divergence conditions in four hours MACD. However, strong support above 1.3245 is anticipated to bring a rally in the coming weeks. The pair’s total decline from 1.4281 should have ended in three waves down to 1.2873 already; above 1.3757 should lift the pair closer to 1.4 to test 1.4281 resistance first.
Overall, the question that remains is whether mid-range correction from 1.6039 has finished its three waves down to 1.1875. The hard break above 1.35 again affirms that the fall from 1.4281 was simply a correction and the general rise from 1.1875 is ongoing. Also, insiders are quick to note that break of 1.4281 will give new life to the argument that mid-range term correction from 1.6039 was completed in three phases down to 1.1875 and that a long-term uptrend could be resuming. On the other hand, below 1.2873 is likely to turn the focus back to the 1.1875 low.
Over the long term, considering the five wave structure of the long uptrend from 2000’s low of 0.8223 to 2008’s high of 1.6093, price actions from 1.6039 are considered merely correction. Thus, watchers first anticipate strong support between 61.8% retracement of 0.8223 to 1.6039 at 1.1209 and that 1.1639 will contain downside. Second, another high above 1.6039 is expected eventually, once correction from 1.6039 has been confirmed as completed.
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