EURUSD Technical Analysis, August 24, 2020

Exclusive Markets Analysts
Exclusive Markets Analysts


Technical Outlook:

EURUSD seems to have carved a meaningful top around 1.1965 levels on August 19, 2020. The currency had given away over 200 pips since then, and print lows around 1.1754 mark. It is pulling back for now and should be ready to resume lower soon.

EURUSD might have completed a larger degree corrective wave A-B-C, a potential expanded flat around 1.1965 levels last week. If the above structure is correct, bears would be inclined to remain in control from here and continue pushing lower towards at least 1.1167 mark.

Also note that the corrective rally had reached up to fibonacci 0.618 retracement of the earlier drop between 1.2555 and 1.0636 respectively. It is quite possible for EURUSD to extend its drop beyond 1.0636 lows as well. We shall confirm the same as price action progresses.

Looking at the short term wave counts, EURUSD has completed an impulse wave between 1.1965 and 1.1754 respectively. It is expected to produce a 3 wave corrective rally towards 1.1885/1.1900 levels going forward. The lower degree waves could be marked as Wave 1 and potential Wave 2.

If the above structure unfolds accordingly, we can expect a counter trend rally to materialize over the next few trading sessions before EURO turns lower again. Bears are looking to come back in action from 1.1885/1.1900 mark.

EURUSD remains a great potential candidate to be sold on rallies from here. Immediate resistance stands around 1.1965 mark.

Trading Strategy:

Short against 1.1970, targeting below 1.0636.

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