EURUSD has not only cleared a major resistance at 1.1500 handle, but has also managed to hit through 1.1900 mark. This is a significant move over the past few weeks and has made most traders to believe that major trend has reversed.
EURUSD has remained in control of bulls since the 1.0636 lows in March 2020 and has carved an impulse rally towards 1.1900 handle last week. The above rally has been clearly marked on the daily chart presented here.
Please note that Wave 2 was a potential triangle while Wave 4 was a flat, which terminated around 1.1167 mark. Ideally, an impulse wave would be followed by a corrective wave in the opposite direction. But in this case it could be different.
The reason is as described here: EURUSD impulse wave from 1.0636 through 1.1900 handle has been a part of a potential expanded flat corrective wave structure. An expanded flat is a corrective wave and unfolds as 3-3-5.
The last wave within an expanded flat wave structure unfolds as an impulse. It could be mistaken as the beginning of a new trend, which is generally not the case. We would want traders to exercise caution here and expect a turn lower.
Also note that EURUSD has managed to reach the fibonacci 0.618 retracement of the previous drop between 1.2555 and 1.0636 levels, around the 1.1800/1.1900 handle. Moreover, it has produced an engulfing bearish candlestick pattern on the daily chart.
EURUSD might turn lower from here, going forward.
Short against 1.1950/60, target remains open.