the EUR/USD is breaking above the previous tops and strong resistance zone (red lines), but will it be able to hold the gains or is the pattern a rising wedge reversal?
The EUR/USD could be in a potential wave 3 (green) breakout BUT price action will need to remain flat and show a sideways corrective pattern or immediate breakout higher… Any strong bearish decline could indicate a false breakout and a reversal or retracement. Especially if the price is able to push below support (blue), then a larger bearish reversal is likely which invalidates (red x) the current bullish outlook. On the other hand, a continued push higher could confirm (green check) the uptrend.
The EUR/USD seems to be completing a wave 5 (dark red) of wave 3 (orange) at the recent high. The current correction could be a wave 4 (orange) as long as the price action remains corrective and stays above the 50% Fibonacci retracement level of wave 4 vs 3. A break below the 50% Fib however invalidates (red x) the current wave outlook. A bullish bounce, breakout, and continuation could confirm (green checks) the uptrend.
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