the EUR/USD showed strong bullish momentum which was able to break above the resistance trend line (dotted red) and confirm a surprise reversal. What is next for the EUR/USD after price was able to reach the key resistance level at 1.1250?
The EUR/USD seems to have completed waves 5 (pink) at the most recent low near 1.10. The sudden yet impulsive move up is likely to be wave A (blue) or wave 1 because of the clear 5 wave pattern on the 1 hour chart. The bearish bounce could start a wave B (blue) correction and the price is likely to find support at the 61.8% Fibonacci retracement level of wave B vs A.
The EUR/USD has either completed 5 waves (green) within potential wave A (blue) or price is still in a wave 4 (green) as long as price stays above the 38.2-50% Fibonacci level. A bullish breakout above the resistance trend line (red) could confirm that. Otherwise a bearish bounce at the resistance (red) could indicate a deeper push lower towards the Fibs of wave B vs A.
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Good trading, Chris Svorcik