the EUR/USD is testing the crucial Fibonacci retracement levels of wave 4 vs 3 (orange) for a bullish breakout or bearish bounce.
4 hour chart
The EUR/USD bearish bounce at the resistance zone and breakout below the support lines (blue) could confirm (green check) the bearish wave outlook. The main target is the 1.10 round support zone. A bullish breakout, however, above 1.1150 invalidates (red x) the bearish 5 wave (orange) pattern and indicates a bullish price swing (dotted green lines).
1 hour chart
The EUR/USD is testing the Fibonacci support levels of the alternative wave outlook, which is indicated by the pink letters and numbers. A bullish bounce at the bottom (blue) of the channel and Fib levels and breakout above the resistance (red) of the channel could invalidate (red x) the bearish wave outlook and confirm a bullish variation. A bullish break is aiming at 1.12 and 1.1250 whereas a bearish breakout aims at 1.10.
This article was originally posted on FX Empire
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