EUR/USD Bearish ABC Pattern within Bullish Wave B

The EUR/USD is building a correction with lower highs and higher lows. Price action seems to be in a bearish ABC pattern within a bullish wave B. What are the key levels to consider?

Price Charts and Technical Analysis

The EUR/USD support (blue line) and resistance (red line) levels are key for determining the next price swing. A bullish breakout above the resistance indicates a completed bearish ABC (red) within wave B (purple) and a continuation higher within the wave C (purple). The targets are the Fibonacci levels although the main Fib target is confluence of the -61.8% Fib and 78.6% Fib at 1.1925. A bearish breakout indicates a downside move towards the Fibonacci retracement levels of wave B (purple). This remains valid as long as price remains above the 100% Fibonacci level.

The EUR/USD 1 hour chart is showing the current indecisiveness well. A bullish breakout above the resistance (red box) confirms a completed ABC (red). But a bearish breakout below the support (blue box) indicates that the waves B and C will shift forward (red arrows). The bulls are expected to keep control, either after the breakout or after a bounce at the Fibonacci retracement levels.

Good trading,

Chris Svorcik

The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter

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