EUR/USD: Steadily Falling

EUR/USD is slowly but steadily falling, forming a pattern with lower highs and lower lows. This is changing trend direction to down, with possible test area the 1.2920 level. Currently prices trade at the 50% retracement level among rumors of a rate cut in the next ECB meeting on May 2nd. If that is the case, the market seems to try to put that scenario into the current prices. The 61,8% retracement level is the last support that bulls could hope to see a rebound. If prices fall further than that level, then bears will be starting to control the trend.

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As far as Elliott waves are concerned, the entire upward move from 1.2740 to 1.32 could very well be just wave A of the bigger degree correction. We could now be trading at wave B of the correction with expectation of a last upward wave C towards the 61.8% retracement of the 1.3720-1.2740.
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For the time being as long as EUR/USD is trading below 1.3085 trend is bearish with first target the 1.2920 area. If prices break below that level then we could expect a test of 1.2850. More updates and analysis regarding this pair is sent to our subscribers which were informed promptly yesterday when I closed my USD/JPY long position at 99.75 and entered short EUR/USD at 1.3044.

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