EUR/USD Bullish Pullback in Massive Wave 3 Downtrend

Dear traders, the EUR/USD made a bullish pullback on Friday. But price action was unable to move above 1.0850 due to the massive downtrend.

4 hour chart

The EUR/USD seems to have completed a minor wave 3 (dark red). Many other wave 3 patterns remain unfinished. Price is expected to continue with the downtrend once price completes its wave 4 (dark red) pullback. Price will probably expand the wave 4 with a new high at the 38.2% Fibonacci retracement level – unless price is able to push below the support zone (blue) immediately. The next target is the 1.0750 support zone where a new wave 4 (orange) could develop.

1 hour chart

The EUR/USD could be building an ABC (green) flat correction within wave 4 (dark red). A bearish breakout or bounce (green check) could confirm the downtrend continuation. A break above the 50% Fib makes the wave 4 less likely (red x).

Good trading,

Chris Svorcik

The analysis has been done with the help of SWAT method (simple wave analysis and trading).

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