the EUR/USD has completed a bearish wave C (purple). The bulls are now back in control… but has the uptrend really restarted?
This article reviews the key levels that confirm a full fledged uptrend. We also review the alternative wave outlook if price action fails to push much higher.
The EUR/USD bullish reversal at the previous bottom confirms the ABC pattern (purple). A bullish breakout is now likely and around the corner.
But the uptrend is still not confirmed, because this depends on how price action breaks above the 21 ema zone. Another sign is the failure of price to break above the deep resistance Fibs (dark red box).
Any signs of hesitation could indicate a complex correction. What does that mean?
In this scenario, the EUR/USD is extending the ABC correction via a WXY correction (dark red). This could take price back down to the key support zone (blue box).
The bulls remain in control if price action bounces at the support (green arrow) OR if price action can break the resistance sooner / immediately (blue arrow).
On the 4 hour chart, it is clear that the wave 5 (orange) of wave C (purple) is over. The bullish breakout is steaming above the multiple resistance trend lines (purple).
Price action can either build a retracement (red arrows) or a bear flag chart pattern (orange arrows). A bullish continuation is expected in both cases. Only a break below the bottom invalidates the bullish outlook (red x).