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EURUSD has extended its gains in the last few weeks back above 1.3800 and now also to 1.3900 where the market may complete a huge ending diagonal pattern.

The ending diagonal is a reversal pattern which means that EURUSD could fall sharply in the beginning of 2014.

EURUSD Elliott Wave 2014 technical analysis daily chart euro dollar

On the 4h chart we can see a recent spike to 1.3900 which makes the move from 1.3290 more extended and complex. Notice that we labeled the rally in wave 5) as a double zigzag because of the overlapping price action.

Keep in mind that we are tracking an ending diagonal on a daily chart as mentioned about where each leg has a corrective structure. So if our count is correct then a bearish turning point could be near, especially if we consider a 150 pip pullback from latest high.

We suspect that the pair will continue lower, but we would love to see broken channel support line as well as wave B swing low to confirm a change in trend. We can also see a bearish divergence on the MACD that is calling for a turning point.

EURUSD Elliott Wave 2014 technical analysis 4 hour chart euro dollar