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EURUSD bounced sharply from the 1.3000 psychological level at the start of January which was most-likely the low of a red wave 2). Notice that bounce from 1.3 is very strong and this typically represents a third wave of a five wave Elliott Wave model.

EURUSD Elliott Wave Analysis January 21 25 2013
EURUSD Elliott Wave Analysis – Click image to enlarge

As such, we assume that the pair is at the start of a red wave 3) within an impulsive wave (C) that may reach even 1.4000 target in 2013. With that said, we will continue to look higher as long as the market trades above the rising channel within the line from November lows and above 1.3000 psychological level.

The current slow price action around 1.3200-1.3400 range in just a minor pause within uptrend.

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