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EUR/USD Bearish Bounce Indicates Wave 4 Pullback

Chris Svorcik

Dear traders,

the EUR/USD is showing bullish price action but price action is facing resistance at the confluence of moving averages and resistance trend line (red).

4 hour chart

The EUR/USD is expected to make a bearish bounce as part of a wave 4 (orange). A downtrend continuation could confirm (green check) the wave pattern and outlook and indicate a decline towards the Fibonacci targets. The bearish swing might complete a wave C (blue) of wave 2 (purple) correction after which a bullish reversal might kick in (green arrows).

1 hour chart

The EUR/USD seems to be bouncing at the 38.2% Fibonacci retracement level of wave 4 vs 3. A bearish breakout could confirm (green check) the wave 4-5 (orange) pattern lower whereas a break above the 61.8% Fibonacci level invalidates (red x) the bearish wave outlook.

Good trading,
Chris Svorcik

The analysis has been done with SWAT method (simple wave analysis and trading)

This article was originally posted on FX Empire