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EURO: Advance Since April Low Is Looking Corrective, Be Aware Of A New Sell-Off

EURUSD reversed higher few weeks back from around 1.2750 level, but recovery since early April still has a corrective look. With that said, we think that move is complex correction, probably a flat and that larger trend will continue lower, especially if we consider a five wave decline from 1.3700 and the start of the year. If we are correct then current bullish leg should stop somewhere around current 1.3400 -1.3450 resistance area.

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On the weekly chart we are also still observing the idea of a Head and Shoulders pattern which if correct, should be near completion based on the parallel trend-lines. This pattern is matching nicely with our Elliott Wave Count, but we still need some confirming price action to make sure that EURUSD is going south. With that said, we would love to see an impulsive fall back to 1.3000 level before bearish reversal can be confirmed! On the other-hand, we will have to change the outlook for the EURUSD if pair will continue higher in the rest of the year, towards 1.3700.

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