the EUR/USD made a break and bounce above the 21 ema zone. Price action could now be in a wave 3 or C pattern.
But price action will need a breakout to confirm the uptrend… because otherwise a reversal is still possible.
This article reviews the key decision zones for the uptrend continuation. We also analyse what-if scenarios during a potential bearish turn around and breakout.
The EUR/USD seems to have completed 5 waves (purple) up as part of either a wave 1 or A (pink). This was followed by an expected ABC pattern (purple).
The main question is whether the ABC pattern has already completed the wave 2 or B (pink). Or will there be an expanded WXY (red) correction with one more swing lower (red arrows).
The key decision zones are the resistance fractal (orange line) and support trend line (green). A breakout above or below the S&R should confirm the direction of the next price swing.
On the 1 hour chart, price action managed to rebreak above the 21 ema zone. Now price action needs to also close above the two Fractals to confirm the uptrend (green arrows). A bearish breakout invalidates the bullish wave outlook in this image. This could be a first indication of a deeper retracement (red dotted arrows) on the higher time frames.