EUR/USD Weekly Close: 1.2163
Daily High/Lows: Fri Jul 20 1.2285/1.2144 Thu Jul 19 1.2325/1.2229 Wed Jul 18 1.2307/1.2217 Tue Jul 17 1.2317/1.2182
Pivots: S3: 1.1969; S2: 1.2056; S1: 1.2110; P: 1.2197; R1: 1.2251; R2: 1.2338; R3: 1.2392
EUR/USD: Last week the EUR/USD came under pressure towards the end of the week on further European concerns. At the beginning of the week, risk appetite moderately dominated, as the Dow rose along with the three commodity currencies – AUD, NZD and CAD. In an environment with an altogether weak EURO, the trade which netted the most profits was the short EUR/AUD, short EUR/CAD and short EUR/NZD trades, as all three pairs made fresh lows in the market. The EUR/USD continues to be the weakest currency and its continued selloff was pronounced on Friday, making a new 2-year low. The EUR/AUD made a new low at 1.1705 this week after the 1.1935 last week; EUR/CAD touched 1.2291 on Friday, and EUR/NZD traded as low as 1.5187. The EUR/USD will likely continue to remain weak, at least on a cross basis, but selling on strength still remains the strategy. A look at the EUR/USD technicals shows that the EUR/USD made a new 2-year low at 1.2144 on Friday since the June 2010 low at 1.1875 which eventually will be revisited. From an Elliott Wave perspective, we are now following the orange Wave (5), looking for the following targets: .618 times wave (1) is 1.2114; 100% times wave (1) is 1.1984. Wave (5) should end within that target zone and once complete, run the Fibonacci tool on the swing move from the start of this 5-wave sequence at 1.3386 to the low. The EUR/USD should eventually revisit the previous Wave 4 at 1.2748. For the coming week, watch for the above-mentioned Wave (5) targets which could lead to a nice corrective reversal. Use these healthy corrective moves to rejoin the downtrends in these pairs.