Keep an eye on EURUSD for shorts after the breakout

The USD reversed strongly to the upside last week, with price on USD Index breaking out of a downward channel. This would be an important sign for a change in trend, even if just temporary.

For the next few days, maybe even weeks we will be tracking a minimum three wave rally up on the USD index which means that EUR, GBP, AUD and other currencies will probably further depreciate.

So with a bullish view on the USD Index we are bearish on the EURUSD and are interested in short opportunities. However, we need a corrective retracement on the intraday basis before we may consider any shorts.

On the latest structure we suspect that prices accomplished a decline in red wave iii) so the current bounce is ideally part of a red wave iv) that may retrace even back to 1.3570. We could be looking for shorts from there but only if the current rise will unfold in three legs.

Gregor Horvat

Grega Horvat Grega is based in Slovenia and has been involved in markets since 2003. He is the owner of Ew-Forecast, but before that he was working for Capital Forex Group and TheLFB.com. His feature articles have been published on FXstreet.com, Thestreet.com, Action forex, Forex TV, Istockanalyst, ForexFactory, Fxtraders.eu, Insidefutures.com, etc. He recently won the award on FXStreet.com for Best Forex Analysis in 2016. At Ew-forecast he helps clients and educates them about the Elliott wave principle and how to label and track unfolding patterns in real time. His approach to the markets is mainly technical. He uses a lot of different methods when analyzing the markets such as candlestick patterns, MA, technical indicators etc. His specialty, however, is Elliott Wave Theory which could be very helpful especially if you know how to use it in combination with other tools/indicators. EW-Forecast To be involved in the market effectively, you need the right guidance and resources, and our team can help you to achieve that. Our team is providing advanced informations about Elliott Wave theory in real time. The Elliott Wave Principle gives you a method for identifying the behavior of the markets and at what points the market is most likely to turn. We help new traders who are interested in Elliott Wave theory to understand it correctly. We are doing our best to explain our views as simple as possible with educational goal, because knowledge itself is power!

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