The end of the correctional phase on EUR/USD

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Updated: 21 April 2020

Hello traders! I would like to bring your attention to the EUR/USD currency pair. Why it is interesting is because it is currently trading at a very important support area.

We can see that23.6% Fibonacci retracement level at 1.0853 has been rejected, back on April 8. There was a spike lower although 4h candle failed to close below this level. The spike down has reached 1.0829 and still hasn’t been broken. This could mean that buyers are holding the price blow the support and soon we might see price moving up.

On the 1-hour chart, there is clear support formed at 1.0816, which has been rejected multiple times. If we look at the most recent rejection, RSI has formed a bullish divergence, which also suggests a change in trend.

Finally, according to the Elliot Wave theory, EUR/USD could have completed the ABC correctional phase, and major uptrend continuation should be expected. There are 3 upside targets as per the 4H chart Fibonacci indicator. First 1.0975, the second is 1.1075 and the third is 1.1174. If it is a major uptrend continuation, the price should reach the final target at 1.1174. But, if its’ correctional upside move, 1.0975 or 1.1075 must be watched for rejection.

Bias: Bullish while above 1.0816

Potential Support Zone: 1.0816 – 1.0853

Potential Targets: 1.0975, 1.1075, 1.1174

Have a profitable trading!