The chart below shows EUR/USD which has been in a downtrend since the 06th of January 2021 which we have labeled WXY which ended around 1.1700. Since the lows on the 31st of March 2021, we have pushed higher in an impulsive manner to current highs at 1.21500.
The impulsive move higher ended with an ending diagonal pattern. A swift move lower marked the end of the current lower degree uptrend and the start of a corrective move.
We believe there is still more room to the upside once we correct lower down to the yellow zone as our ideal target level. Once we are in the yellow zone we will be looking for confirming price action that the correction is over and we can take long positions. If we break 1.17000 that would invalidate our bullish count and our alternative long-term bearish count would then come into effect.
Key News events to look out for this week: Wednesday 5th of May EU Economic Forecasts, Friday 7th of May ECB President Lagarde Speaks.
Res: 1.21500; 1.22415; 1.24000
Supp: 1.19276; 1.18768; 1.17000
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