the EUR/USD made a deeper bearish retracement but price failed to break below the 50% Fibonacci retracement level. Will price bounce for an uptrend continuation or will there be a larger bearish reversal?
The EUR/USD could have completed a wave 4 (blue) retracement if price is able to stay above the 50% Fibonacci of wave 4 vs 3. A break above the resistance trend line (red) could confirm the bullish breakout and indicate a move up towards the Fibonacci targets of wave 3 vs 1. However, a break below the 50% Fib and support trend line (blue) however indicates a bearish reversal towards 1.1050, 1.10, and possibly even 1.0950.
The EUR/USD bearish price action looks choppy and corrective, which could confirm the ABC (green) wave pattern within wave 4 (blue). This could change if price is able to show a strong breakout below the support zone. The 1.11 price level is from this perspective a key decision zone.
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Good trading, Chris Svorcik