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EURUSD fell sharply last week and closed well below the 1.3034 swing low support which puts the bearish price action back in play. In fact, the decline from 1.3195 was very strong and sharp, which in many cases represents an impulsive wave and direction of trend.

As such, we need to respect this price action so we think it’s better to stick with the downtrend and look for possible short entries at this stage.

From an Elliott Wave perspective we are tracking a one-two, one-two set-up with sub-wave (ii) now underway to 1.3020/50 resistance area.

The reason why we also expect bearish price action to continue is a broken channel line on the Daily chart as shown below. We however would turn bullish again only if we pass 1.3130 level.

EURUSD Intra-day

EURUSD Intra Day Elliott Wave Analysis and technical outlook May 13 2013

EURUSD Daily

EURUSD Daily Chart Elliott Wave Analysis and technical outlook May 13 2013