the EUR/USD is showing strong bullish momentum as indicated by the steep angled trend line (blue). A bullish continuation this week seems likely, let’s review.
The EUR/USD has reached the 100% Fibonacci target of wave 3 vs 1 and is now building a small pullback. The EUR/USD could either make a larger bearish retracement (orange arrow) towards the support zone (blue box), which is likely to act as a support zone, or continue immediately higher towards the Fibonacci targets of wave 3 vs 1.
The EUR/USD bearish pullback could retrace to and bounce at the Fibonacci support levels of wave 4 vs 3. A bullish continuation and breakout must push above the resistance trend line (red) to confirm the uptrend. A break below the 50% Fibonacci level, however, invalidates the wave 4 (blue) pattern.
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Good trading, Chris Svorcik