EUR/USD: growth will continue (but correction is unavoidable).
The euro looks strong throughout the week. The nature of the movement predicted in the previous forecast came true, only the numbers did not match.
Once again, there is a bearish divergence on the M15 and H1 charts. The charts are short-term, therefore, the signal is also valid for several days. The upside bounce, that began on 28/01/2022 is still a corrective movement within the downtrend. However, this impulse is equal in magnitude to the downward movement preceding it (14-18/01). Therefore, we can speak, at least, about the conversion of the downtrend 2021-2022 in flat. Given the upside momentum and the bullish daily chart divergence, we expect the pair to continue rising after the correction. Based on the available markings for Fibonacci levels and the actual support and resistance levels displayed by the price on charts, we will single out two most likely areas for the end of the correction. This is the range of levels 1.1330-45 and, more likely, 1.1250-60.
After the end of the correction, as the main scenario, we consider the growth of the euro to the levels of 1.1600 and above. The optimistic scenario assumes growth to the range of levels from 1.1670 (261.8% Fibo-extension from the growth wave 28/01-02/02) to 1.1700 (161.8% Fibo-extension from the growth wave 28/01-04/02). The medium forecast, based on the ratio of previous values of ascending and descending movements, assumes that the pair will reach the level of 1.1600 (in this area there is a long-term price level and a 38.2% correction level of the entire trend in 2021-2022).
Other (less expected) versions for the situation's evolution.
1. Formation of a time-symmetrical figure, the left part of which was formed from November 2021 and ended with a minimum at the end of January 2022. In this case, we’ll see fluctuations in a narrow range within 1.5-2 months.
2. The fall of the euro to the January minimum. Then, the strength of the upward momentum is compensated by the fall and EUR/USD, as well as in the previous version, will stay in the range.
How to trade.
Open long in EUR/USD after the end of the correction with a target of 1.1600.
Correction's end is determined by the achievement of support levels 1.1330-45 or 1.1250-60 and the signals of the indicators on the M15 chart. The expected date for the end of the correction is 08 or 09.02.
The stop-loss level is below the correction's minimum.
P.S. It’s possible to sell EUR/USD short-term, but it seems to us more risky.
Once again, there is a bearish divergence on the M15 and H1 charts. The charts are short-term, therefore, the signal is also valid for several days. The upside bounce, that began on 28/01/2022 is still a corrective movement within the downtrend. However, this impulse is equal in magnitude to the downward movement preceding it (14-18/01). Therefore, we can speak, at least, about the conversion of the downtrend 2021-2022 in flat. Given the upside momentum and the bullish daily chart divergence, we expect the pair to continue rising after the correction. Based on the available markings for Fibonacci levels and the actual support and resistance levels displayed by the price on charts, we will single out two most likely areas for the end of the correction. This is the range of levels 1.1330-45 and, more likely, 1.1250-60.
After the end of the correction, as the main scenario, we consider the growth of the euro to the levels of 1.1600 and above. The optimistic scenario assumes growth to the range of levels from 1.1670 (261.8% Fibo-extension from the growth wave 28/01-02/02) to 1.1700 (161.8% Fibo-extension from the growth wave 28/01-04/02). The medium forecast, based on the ratio of previous values of ascending and descending movements, assumes that the pair will reach the level of 1.1600 (in this area there is a long-term price level and a 38.2% correction level of the entire trend in 2021-2022).
Other (less expected) versions for the situation's evolution.
1. Formation of a time-symmetrical figure, the left part of which was formed from November 2021 and ended with a minimum at the end of January 2022. In this case, we’ll see fluctuations in a narrow range within 1.5-2 months.
2. The fall of the euro to the January minimum. Then, the strength of the upward momentum is compensated by the fall and EUR/USD, as well as in the previous version, will stay in the range.
How to trade.
Open long in EUR/USD after the end of the correction with a target of 1.1600.
Correction's end is determined by the achievement of support levels 1.1330-45 or 1.1250-60 and the signals of the indicators on the M15 chart. The expected date for the end of the correction is 08 or 09.02.
The stop-loss level is below the correction's minimum.
P.S. It’s possible to sell EUR/USD short-term, but it seems to us more risky.
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