EURUSD Technical Analysis, August 31, 2020

Exclusive Markets Analysts
Exclusive Markets Analysts

EURUSD:


Technical Outlook:

EURUSD seems to have carved a meaningful lower top around 1.1930 levels. It is trading lower at 1.1900/05 handle for now. A break below 1.1867 from here would confirm a top is in place already. Bears would be poised to be back in control soon. Look lower from here.

EURUSD has completed 5 wave rally from 1.0636 through 1.1965 mark. Ideally, an impulse wave is followed by a corrective wave in the opposite direction. In this case, possibility remains that the impulse wave was a part of the expanded flat structure.

If the above proposed wave structure is correct, EURUSD should be up for a bearish reversal going forward. Alternately, if the larger trend has resumed on the higher side from 1.0636, the currency should produce a corrective drop at least.

Either way, EURUSD bears seem to be in control and poised to push lower from here. Looking at the lower degree wave counts since 1.1965 highs, a potential Wave 1 looks to be in place between 1.1965 and 1.1754 levels. Subsequently, a corrective Wave 2 might be complete around 1.1930 today.

If the lower degree counts hold, EURUSD should stay below 1.1965 and reverse lower from here. A break below 1.1754 would accelerate the drop further towards 1.1167, the previous Wave 4 termination point at least. Watch out for a potential bearish reversal from here.

EURUSD remains a great candidate to be sold on rallies from here. Please note that a larger degree wave structure is pointing towards 1.0636 and lower. Bears might be preparing to come back strong in control from here.


Trading Strategy:

Short against 1.1970, targeting at least 1.1167.

Legal Disclaimer: This article is not investment advice. The data provided is for marketing material purposes and is not intended to confuse nor guide our clients on trading decisions. Any investment activity performed is perceived to be a self-directed decision. Exclusive Markets is not liable for losses that may occur because of a decision made after reading the information published on our research page or any other media.

Risk Warning: Trading the capital markets is risky therefore further knowledge and experience may be required. Apply appropriate risk and money management always and ensure the implementation of safe leverage.

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