EUR/USD Elliott Wave: New yearly low opens the door for further downside [Video]

EUR/USD has finally hit a new low for the year, which we thought would happen sooner or later. As you know, we initially expected this breakdown to come from a triangle, but the decline became much stronger and more extended after price broke out of the base channel on September 16, so it is not surprising that we are now seeing new yearly lows.

The bearish impulse still looks incomplete, suggesting that more weakness could follow. However, with price now at a new yearly low, some stabilization is possible. Ideally, we could see a wave four recovery, potentially similar in size to wave two, with resistance around 1.1400–1.1460. This could be an interesting area from where the market may resume lower while price remains below the 1.1565 invalidation level.

If we are correct, then on the higher-time-frame daily chart, we could now be in wave five, targeting the lower trend line of a potential leading diagonal. Alternatively, the decline could still be part of wave A of a second zigzag.

For more analysis like this, you can watch below our latest recording of a live webinar streamed on September 28: