We have major news coming out later this morning and tomorrow that could dramatically effect EUR/USD. This post is made in advance of the news to establish a plan prior to emotions running high during the potentially volatile events.
The Elliott Wave count appears mature to the down side. The sloppy and overlapping continuation lower over the past 2 weeks suggests we may be in an ending diagonal pattern. If correct, look for prices to run up to the origination of the pattern near 1.0830.
As labeled on the chart, 1.0430 is a key level. That is where blue iii would be the shortest of blue i, iii, v. That would break Elliott's rules so that can be used to establish risk or perhaps implement a stop and reverse.
On Balance volume has also been lagging dramatically. The volume in this downside move has not been robust.
Sentiment is currently near +1.24. If during the ECB announcement today or NFP announcement tomorrow, if the real time sentiment reading drops, that may suggest the bulls have an advantage (because SSI is a contrarian indicator).
Bottom line, this pair is ripe to bounce to the 1.08-1.09 handle. Above 1.1090 suggests a much large trend higher is ensuing. Bears can sharpen their claws int he 1.08-1.10 zone. 1.0430 is key to this view.
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