**EUR/USD Elliott Wave Analysis: Potential Bullish Rebound Forming – Adapted from ActionForex.com Analysis by Chris Svorcik**
The EUR/USD pair has recently showcased signs of a potential bullish reversal. Based on an in-depth Elliott Wave analysis, the currency pair has possibly completed a corrective pattern and may be preparing for a bullish move. This interpretation relies heavily on the wave structure, momentum indicators, and key price levels.
This analysis is based on the original technical report by Chris Svorcik on ActionForex.com. The original ideas, forecasts, and insights credited to him are expanded here with detailed technical implications and added commentary.
## Overview of the Current Market Situation
– The EUR/USD pair has been embroiled in a bearish downturn in recent weeks, which appeared to form a complex corrective structure.
– Based on current wave counts, this downside correction is possibly completing or has already completed its final wave.
– Elliott Wave theory points to an ABC correction that now transitions toward a new bullish impulse, potentially retracing previously lost ground.
## Elliott Wave Perspective
Elliott Wave theory allows traders to interpret market price movements as repetitive wave patterns based on crowd psychology. Each complete cycle consists of five impulse waves followed by three corrective waves. Using this lens:
– The recent bearish movement in EUR/USD seems to have formed a three-wave (ABC) correction.
– The first move downward (Wave A) was impulsive, followed by a smaller corrective rebound (Wave B), and then another strong move lower (Wave C).
– Wave C appears to be near completion if not already completed, indicating the potential start of a new bullish trend.
### Detailed Breakdown
– **Wave A**: An impulsive downward move setting the tone for the corrective phase.
– **Wave B**: A minor retracement or pullback, possibly forming a zigzag or flat pattern.
– **Wave C**: A final leg downward that seems to be extending to complete the entire ABC corrective structure.
Wave C often mirrors or completes Wave A in terms of length or momentum characteristics. Analysts use Fibonacci extension tools to evaluate potential termination points for Wave C, notably the 100% and 161.8% extensions of Wave A.
In the current EUR/USD case:
– Wave C may have terminated near the 100% Fibonacci extension of Wave A.
– Price action around this level has begun to show exhaustion in bearish momentum.
– Oscillators, such as the Relative Strength Index (RSI), hint at oversold conditions, lending credibility to a potential reversal.
## Technical Indicators Supporting the Wave Count
Several technical tools and indicators align with the Elliott Wave scenario:
### Moving Averages
– Price recently dipped below the 21-period Exponential Moving Average (EMA) but has started floating back above it.
– Sustained closes above the 21-EMA can imply strengthening bullish momentum.
– A bullish crossover between the 21-EMA and the 144-EMA would emphatically validate the start of a new bullish phase.
### RSI and Momentum Indicators
– The RSI has been scraping the oversold territory, indicating a potential bullish rebound as selling pressure weakens.
– MACD histogram and signal lines are showing diminishing bearish momentum.
– A bullish crossover in MACD would provide further confirmation of trend change.
### Fibonacci Support and Resistance Levels
– Support near the 1.0700 level lines up with the 100% Fibonacci extension of Wave A, suggesting strong buying interest.
– Immediate resistance lies near the 1.0800 level, followed by congestion zones at 1.0850 and 1.0900.
– A break above 1.0850 could indicate that the ABC correction is truly over and that a new impulse wave up, possibly Wave 1 of a larger cycle, is underway.
## Bullish Scenarios Emerging from Wave Structure
Assuming that Wave C of the downtrend is complete, we can expect a bullish impulse to sequence as follows:
– **Wave
Read more on EUR/USD trading.