Weekly waves: EUR/USD, Gold and Bitcoin

EUR/USD new low aims at  0.9750 target

The EUR/USD made a new low again after a shallow bullish correction:

1. The EUR/USD made a bearish bounce at the 38.2% Fibonacci retracement level.

2. The break below the previous bottom could either be part of a complex wave 4 (yellow) or part of the downtrend within wave 5 (yellow). We prefer the wave 5 scenario and expect price action to make a bearish bounce at the resistance trend line (orange) and/or break the bottom and a new lower low.

3. The main target zone is the support area around 0.9750-0.98.

4. A break above the resistance trend line (orange) would however change the perspective and indicate the end of the downtrend. 

5. A stronger bullish retracement could emerge within wave 4 (gray) after price action completes wave 5 (yellow) of wave 5 (pink) of wave 3 (gray).

Gold testing key 38.2% Fibonacci support

Gold (XAU/USD) is testing the support zone (blue box) and Fibonacci retracement levels:

1. The XAU/USD seems to be completing a wave 5 (green) of a larger ABC (yellow) correction in wave 4 (pink).

2. The 38.2% and 50% Fibonacci support levels should remain unbroken if indeed this Elliott Wave analysis is correct and price action is within a wave 4 (pink).

3. A break below the 50% Fibonacci is a first warning that the current bullish Elliott Wave analysis is incorrect whereas a move towards the 78.6% Fib invalidates it.

4. A bullish recovery, however, could develop slowly with a momentum upwards (blue arrow) followed by a deep bearish retracement (red arrow).

5. Price action might only break for a new higher high in 2023. First price action will need to test the double top and then after a berish bounce, price action could push above it.

BTC/USD price action too bearish for any reversal

Bitcoin (BTC/USD) analysis from last week seems unlikely at the moment because of the bearish momentum and lengthy and shallow bullish price movement:

1. BTC/USD needs a break above (blue arrow) the resistance trend lines (orange) and 50% Fibonacci level before the bulls can be optimistic about any kind of rally.

2. Therefore, we decided to change the Elliott Wave analysis this week to provide a fresh and new perspective.

3. The bullish correction was probably a wave 4 (orange) within a downtrend, rather than a wave A (or a larger ABC up).

4. The current bearish swing is expected to be a wave 5 (orange). 

5. A break below (red arrows) the previous low would confirm the wave 5 (orange).

6. The main bearish targets are $15k and $10k.

7. A bullish rebound (blue arrows) is expected at one of these targets.

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The analysis has been done with the indicators and template from the SWAT method simple wave analysis and trading. For more daily technical and wave analysis and updates, sign-up to our newsletter