The EUR/USD is again testing the support zone (blue lines) at 1.1250, which remains a major decision zone for a bullish breakout or bearish bounce. A bearish breakout could indicate a bearish wave 3 (red) whereas a bullish break confirms a bullish wave Y (purple).
The EUR/USD needs to push above the resistance trend line (red) or below the support trend lines (blue) before a trend direction can be established and confirmed. Price is currently either in a wave C (blue) of a larger bearish ABC zigzag or price is starting a larger downtrend via waves 123 (red).
The EUR/USD seems to be in a wave 4 (orange) unless price manages to break above the 61.8% Fibonacci retracement level of wave 4 vs 3. In that case a larger bullish reversal could take place. A bearish bounce at the Fibs of wave 4 vs 3 could see price retest the support at 1.1250 again.
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