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EURUSD broke higher last week as expected and closed above the important 1.3400 resistance level after a nice pull-back down to 1.3250. The current break is just another confirmation of  our bullish view for an impulsive wave 3) rise in wave (C).

EUR USD Daily Chart Elliott Wave Analysis January 28 2013

As such, we expect even higher levels now towards the 1.3640/1.3700 next week while market trades above 1.3250 support. Meanwhile any pull-backs on a lower time frame should prove corrective.

The reason why we think that EURUSD is headed much higher is USD Index which is still trading above its 2012 September low.

A break of that level should occur as recovery since then is clearly corrective in nature so movement should be fully retraced which will pressure the USD and lift the EUR.

In fact we are tracking a triangle pattern, which is a continuation pattern in our case that means break lower.

US Dollar Index Daily Chart Elliott Wave Analysis January 2013

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