EURUSD has been quite predictable this week, and both short and long positions have worked well. However, now it is stuck in consolidation mode, which may either be hesitation before a rally or consolidation before a new low is hit.
There has been a clear 3 wave move starting from April 12, however there can be 2 scenarios playing out as long as price oscillates between the two horizontal red lines in the chart below.
- Scenario 1: If a new low is made, taking out 1.1233, it is very likely that this decline was an impulsive one, suggesting that we should expect a recovery of EURUSD only after 1.1143-1.1170 levels are tested.
- Scenario 2: If starting from now on, price jumps above 1.1292, there is a high chance that the decline is over and it was a corrective A-B-C of the bigger rally that has started in the last days of February. Still, the confirmation we will need to see if EURUSD is to retests highs is the break of 1.1346 and close above that line.
For the moment it would be smart to remain on the sidelines until price breaks either above 1.129 or below 1.123, however for risk lovers, you could try Buying EURUSD in current levels
Stop Loss at Yesterday’s low.
Target 1 :1.129
Target 2: 1.13 and later 1.134.
If 1.134 is taken out aggressively, long EURUSD should be safe and we should aim for higher targets while adjusting Stop Loss.