After the huge Draghi drama, where is EUR/USD headed next?
The teams at Nomura and JP Morgan provide analysis:
Here is their view, courtesy of eFXnews:
The technical strategy teams at Nomura and JP Morgan provide their insights on the Elliott-Wave analysis and setup for EUR/USD around current levels. Nomura’s view has a shorter time-frame than that of JP Morgan.
Nomura: Once retracement completes, expect another 5-wave rally.
“Euro is correcting the first wave higher from 1.0524. So far the retracement has met the 38.2% Fib at 1.0805. The previous 4th wave low at 1.0789 also offered minor support for this corrective pullback.
S/t, we expect the 1.0800/0780 zone to mark a corrective low but there is scope for a deeper retracement to 1.0750 or 1.0700.
Because we saw a 5-wave rally off the low, we are looking for another 5-wave rally once this pullback completes,” Nomura argues.
JP Morgan: Given structures are still endangering the 2015 low at 1.0462.
“Despite the massive short-covering rally of Thursday last week we still see a very high likelihood that we are only dealing with an internal 4th wave recovery which would not penetrate the wave 1 low at 1.1087.
Below the latter the odds remain in favor of a continued and incomplete down-rotation which should at least challenge key-support at 1.0485/62 (wave 3 projection/2015 low).
A break above 1.1087 though would indicate a game change in favor of a broader recovery, which would need a break above 1.1216 (w. trend) to be confirmed,” JPM projects.
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