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According to technical analysts at Goldman Sachs, Elliott Wave Theory suggests that the EUR/USD is likely to hit a small bump in the road from current prices before undergoing a bullish continuation.

Key quotes

“As a reminder, the market has been in a corrective process since the August low.

It’s since formed the A and B legs of an incomplete ABC corrective advance. The next important level in focus is 1.1515; targeted support for wave B. This should be an area to consider re-engaging in topside exposure. From there, an eventual B wave could extend as far as 1.1928- 1.1946.

Confidence in reaching this level would increase above the 1.1733 high from late-August.

Getting to 1.1928-1.1946 would then complete a full corrective process. After which EURUSD should in theory be in a better place to resume its underlying downtrend. The alternative is that wave B endures for a while longer, in a complex range consolidation; i.e. sideways between 1.15/1.17 for a period of time. Would have to break further than 1.15 to really call into question this underlying bias.

View: Watch for support to hold near 1.1515 and no lower than 1.15. Target 1.1928-1.1946. Confidence will increase above 1.1733. Consider downside exposure if/once ~1.19 is reached.”

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